Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

DEATH OF A MEMBER

Mr. Speaker: I regret to have to inform the House of the death of Edward Joseph Fletcher, Esq., Member for Darlington, and I desire, on behalf of the House, to express our sense of the loss we have sustained and our sympathy with the relatives of the hon. Member.

Oral Answers to Questions — INDUSTRY

National Economic Development Council (Industrial Investment)

Mr. Dykes: asked the Secretary of State for Industry when he next plans to chair a meeting of the National Economic Development Council to discuss industrial investment in new assets by United Kingdom companies.

The Secretary of State for Industry (Mr. Patrick Jenkin): Meetings of the National Economic Development Council are normally chaired by my right hon. and learned Friend the Chancellor of the Exchequer. Investment features regularly in NEDC discussions and may well come up at the next meeting in March.

Mr. Dykes: I thank my right hon. Friend for that answer. Although the existence of a deficit on the corporate account capital account of companies has been

a feature for 10 years or more and has somewhat disguised the insufficiency of investment in certain key sectors, what steps might be taken within the NEDC, in conjunction with conversations with the banks, to determine which sectors might benefit from more new investment capital in the future to get growth again?

Mr. Jenkin: There is no evidence of a shortage of capital. Investment depends crucially on profitability and, as the Confederation of British Industry pointed out at the January National Economic Development Council meeting, profits of industrial and commercial companies, excluding North sea oil, fell from around 10 per cent. in the years up to 1973–74 to below 3 per cent. in 1980–81 and have recovered only to around 4 per cent. in the current year. Future investment depends crucially on rebuilding the profits of industry.

Mr. John Grant: Has the Secretary of State examined what last week's OECD report said about investment? Will he throw off the Chancellor's shackles and stand up for British industry and for the unemployed? With regard to that report in particular, does he agree with it that we need more public sector investment, that industry needs more help with its costs and that these things should take priority over pre-election tax bribes?

Mr. Jenkin: This question is about industrial investment, not about public sector investment. I am bound to tell the hon. Gentleman, however, that the absolute precondition for restoring the prosperity of this country has been the fall in inflation. [HON. MEMBERS: "Hear, hear."] I hope that the hon. Gentleman cheers as loudly as anyone else the fact that inflation is now below 5 per cent.

Manufacturing Output

Mr. Winnick: asked the Secretary of State for Industry what has been the percentage fall in manufacturing output since May 1979; and what is the average change for the other European Community countries in the same period.

The Under-Secretary of State for Industry (Mr. John Butcher): Between 1979 and the third quarter of 1982, the latest period for which comparable figures are available, the index of manufacturing production in the United Kingdom fell by 15 per cent. Between the same two periods the index for the European Community as a whole fell by some 7½ per cent.

Mr. Winnick: Is the Minister aware that the considerable difference in the drop in manufacturing output since May 1979 between Britain and other EC countries shows only too clearly the disastrous effect on British industry of the Government's economic policies? Is the Minister further aware, as he should be, bearing in mind his constituency, that the drop in manufacturing output, which is probably now nearer 20 per cent., shows only too clearly the reason for the massive redundancies and the factory closures in the west midlands and the crisis facing that region, as unemployment there is now among the highest in the United Kingdom?

Mr. Butcher: I believe that to be an over-simplistic analysis. If the hon. Gentleman considers the period 1970 to 1980, he will note that the inflation rate in total during that period was 360 per cent., that wages went up by 424 per cent. and that output went up by 17 per cent. That is an awful score within which to face the vagaries of a world recession. I particularly take the hon. Gentleman's point on industrial production, but I ask him again to consider the trends. With regard to increases in productivity, we are now outpacing our European competitors in the main. Of our major competitors, only the Japanese continue to beat us on a world scale.

Mrs. Kellett-Bowman: Will my hon. Friend accept that he have taken the very words out of my mouth? I was about to ask him to confirm that now that we have overcome the problems created by the Labour Government, to which he referred, our productivity is outstripping that of our EC competitors?

Mr. Butcher: The evidence, which is based on the trends, is quite encouraging. Production fell over the year ending the third quarter of 1982 by 1½ per cent. It fell by 3½ per cent. in France, 4½ per cent. in Germany and 9½ per cent. in the United States. The trend is to be welcomed. The basis of the benign telepathy that exists between my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) and myself, and the consequent concord, is one that will surely be recognised in the House.

Mr. Orme: The Minister has not said why we are at the bottom of the OECD league. The manufacturing sector now employs only 27 per cent. of those who are in employment. Does the Minister agree that that is reaching a dangerously low level? What will the Government do about it?

Mr. Butcher: Undoubtedly, our future prosperity will depend on the maintenance of a healthy, productive and competitive manufacturing base. We have defects in our economy that will take a long time to overcome. We have been producing goods for which there is low demand and we have not been producing enough goods for which there is high demand. We have been operating and developing a mismatched economy, and it will take a long time to put things right.

Boilers (Coal Conversion)

Mr. Kenneth Carlisle: asked the Secretary of State for Industry how much of the finance of £50 million allocated to the scheme for converting boilers to the use of coal has been spent.

The Under-Secretary of State for Industry (Mr. John MacGregor): By 31 January 1983 offers totalling over £14·6 million in grant had been made, of which £1·3 million had been paid out.

Mr. Carlisle: Is my hon. Friend aware that our coal conversion scheme has been made much more attractive by the addition of the Common Market loan scheme? As the two schemes have been running together for only about six months and are due to end in March—there has not been much time to put together viable projects—will my hon. Friend consider extending the schemes? Not all the money originally allocated has been used.

Mr. MacGregor: My hon. Friend is right. The rate of applications seems to have increased since details of the cheap ECSC loans were announced. A further sum of about £10 million is still under consideration. I hope that many companies are still considering this attractive scheme. Companies with coal-firing projects should submit their applications as soon as possible. We are anxious to receive them. I cannot say what the position will be after March.

Mr. Dormand: I acknowledge that the overall take-up for so welcome a scheme is disappointing. Will the Minister dismiss any suggestion of winding it up? I understand that that has been discussed. Does the hon. Gentleman agree that if the scope of the scheme were widened and it received greater publicity the number of applications would increase?

Mr. MacGregor: The scope of the scheme is as comprehensive as possible. The Industry Act 1972 precludes the giving of assistance to bodies such as local authorities, hospitals and schools. However, I think that the scope has been widened considerably. I shall do everything that I can to continue to publicise the scheme, but other considerations seem to prevent a greater take-up. For example, there are still fears in some companies about the effect on coal prices of possible future industrial action. We must try to eliminate those fears.

A320 Airbus

Mr. Andrew F. Bennett: asked the the Secretary of State for Industry when he last met the chairman of British Aerospace to discuss funding for the A320 Airbus and related issues; and if he will make a statement.

The Minister of State, Department of Industry (Mr. Norman Lamont): Department of Industry Ministers have regular contact with the chairman of British Aerospace. The A320 project has been among the topics discussed with him. I cannot at this stage make a statement on the question of launch aid.

Mr. Bennett: Does the Minister accept that there is much anxiety among workers in British Aerospace about their job prospects? Is he aware that it seems that much more confidence is being shown in the future of civil avaiation by the French Government than by the British


Government? Is it not time that we showed our confidence in the industry and started to take decisions so that we do not miss the bus in the next few months?

Mr. Lamont: I understand that there is considerable anxiety about the future of civil aerospace projects. There are serious uncertainties surrounding the A320. First, the engine is not yet available for the aircraft. Secondly, the market is uncertain, which is why Boeing has delayed its 150-seat aeroplane. Thirdly, we must be satisfied about the viability of the project. General Electric and SNECMA have put forward proposals for a derivative engine—the CFM 56–54—which might be suitable for the A320. The Airbus partners are now considering whether to seek the reaction of the airlines to this proposal. We shall examine that when the partners return to us.

Sir Anthony Meyer: Is it not regrettable that British Airways and other European airlines fail to make any effort to buy a European aircraft that is every bit as good as the equivalent American aircraft now available?

Mr. Lamont: First, British Airways must make its decisions on commercial lines. Secondly, despite recent publicity, no decisions have been made by British Airways about impending purchase of aircraft. Thirdly, we must remember that the A320 will not be available until 1988. I am sure that British Airways will give consideration to the aircraft. The French have not made a final commitment to the aircraft.

Dr. John Cunningham: Is it not right that the chairman of British Aerospace has been pressing the Government for a decision since the spring of 1982? Does not the inability of British Aerospace to proceed with this main airframe project without public assistance—without Government launching aid—underline the irrelevance of privatisation to the future of the British aerospace industry?

Mr. Lamont: We have said that in principle we are prepared to support an application for launch aid provided that it is shown that this is a commercial and viable project. We have had far too many prestige and political aircraft in the past. It is essential that we know more about the aircraft's engines before we take a momentous decision involving huge public expenditure.

Mr. Colvin: My hon. Friend is quite right in assuming that there is no point in developing an aircraft without having engines to power it. Will he report to the House on the progress of talks between Rolls-Royce and Pratt and Whitney on future collaboration on the RJ500 engine, which is one of those designed to power the new generation of 150-seat airliners?

Mr. Lamont: The discussions between Rolls-Royce and Pratt and Whitney are continuing. They are extremely complex negotiations. I cannot anticipate when I shall be able to make an announcement to the House.

British Airways

Mr. Colvin: asked the Secretary of State for Industry when he last had a meeting with the chairman of British Airways to discuss the funding of the support costs of Concorde and the purchase by British Airways of new aircraft.

Mr. Norman Lamont: The chairman of British Airways is in regular touch with my right hon. and noble

Friend the Secretary of State for Trade on a variety of issues. Industry Ministers have also discussed these matters with Sir John King.

Mr. Colvin: Does my hon. Friend agree that the 200th anniversary of man's first flight is hardly the year in which the Government should pull the rug from under the feet of the Concorde project, which was a major achievement in aeronautical progress, especially when British Airways has said that it is prepared to shoulder the full burden of support costs for flying Concorde as from April 1984? With regard to the second part of my question, which relates to the purchase of new aircraft by British Airways—

Mr. Speaker: Order. We have finished with the first part of the question and we have had enough of the second.

Mr. Lamont: As my hon. Friend said, we put to British Airways the suggestion that it should take over the future costs of supporting Concorde. The British. Airways board replied that it could take over the future costs of supporting Concorde subject to agreement being reached on a number of matters. We very much welcome this conclusion, but we are still considering some of the detailed matters. It is not possible yet to say when a final announcement will be made to the House.

Mr. Penhaligon: Will the Minister outline the Government's view on supersonic flight? Is he aware that the west country is plagued with Concorde booms night after night for six months of the year? An hon. Member representing a west country seat receives scores of letters about this. Does he agree that this problem outlaws supersonic aircraft for commercial purposes?

Mr. Lamont: Questions about noise are for the Department of Trade and the Department of the Environment.

Small Engineering Firms Investment Scheme

Sir David Price: asked the Secretary of State for Industry how far the small engineering firms investment scheme in 1982 achieved its objectives; and if he will introduce a similar scheme in 1983.

Mr. MacGregor: I am in no doubt that the small engineering firms investment scheme is achieving its objectives. By 28 January 1983, 1,393 offers had been made involving assistance of £31 million, of which £8.1 million has been paid out. It is not possible to say, given the other calls on limited funds, whether there will be a new scheme.

Sir David Price: Does my hon. Friend agree that in the engineering industry today machines and equipment become technologically obsolete long before they are physically redundant? Does he further agree that the scheme has given small firms a chance to remain competitive and up to date? Will he undertake to reintroduce it as soon as he can persuade our right hon. and learned Friend the Chancellor of the Exchequer to give him the money to do so?

Mr. MacGregor: I noted my hon. Friend's second point. There are no further funds for the scheme. There was a limit for this year, which we increased by 50 per cent. I entirely agree with his first point. The scheme was designed to assist small firms to buy technologically


advanced capital equipment. As a result of all our evidence and the surveys that we have carried out, I am sure that the scheme has achieved that. I hope that firms that have been made offers but have not yet placed orders will do so, as it is important for them to become technologically up to date as soon as possible.

Mr. Park: Does the Minister agree that one of the problems is a lack of knowledge of Government schemes within industry? Why, when the Government hit on a scheme which apparently rings bells and is immediately taken up, do they not allocate a further tranche of money to it?

Mr. MacGregor: I agree that there are often problems with making schemes more widely known to the firms that they are intended to help. We are putting a great deal of effort into improving that. However, that is not the case with this scheme. We marketed it well and received a good response. That is why we increased the funds by 50 per cent.

Mr. Grylls: Does my hon. Friend agree that it is astonishing that, when the Department of Industry hits on a scheme that is successful and receives much interest from small firms, it promptly stops it? Does he further agree that that cannot be because of a shortage of money, as the Government had no difficulty in finding £100 million to force the British Steel Corporation to keep open its works at Ravenscraig? Does he agree that the money exists?

Mr. MacGregor: There are many other calls on the Department's funds, many of which are of high priority. We increased the amount for the scheme because we recognised its advantages. There remains £22 million for offers that have been made and which, it they are taken up by firms, will have a good impact on the engineering industry and the manufacturing firms that provide the equipment. That sum has still to be used.

Post Office (Investment)

Mr. Cunliffe: asked the Secretary of State for Industry when he next expects to meet the chairman of the Post Office to discuss the investment programme for the industry.

The Minister for Industry and Information Technology (Mr. Kenneth Baker): My right hon. Friend has no immediate plans to discuss with the Post Office chairman the corporation's investment programme, which has risen from £42 million in 1978–79 to £115 million in 1982–83 and is planned to rise to £130 million in 1983–84.

Mr. Cunliffe: Bearing in mind the improvements in productivity and service to customers, would it not be prudent for the Minister to embark on extra capital investment and expenditure for more new plant and facilities for the Post Office?

Mr. Baker: There has been a substantial increase in the Post Office's capital expenditure programme. It has trebled since we have been in office. That allows the Post Office to go ahead with its investment programme on such things as letter sorting equipment.

Mr. Wigley: Is the Minister aware that, once again, there is uncertainty and anxiety in rural areas about the future of small post offices and sub-post offices there?
Will he give an assurance that his Department is not examining any further programme of closure in that regard?

Mr. Baker: I can give the hon. Gentleman the assurance he seeks. The Post Office, rather than the Government, has to consider the size and scope of the network and the throughput of activity in sub-post offices.

Mr. Greenway: Is my hon. Friend aware of the anxieties of industrialists in my constituency about the last post collection being moved from 7 pm to 5.30 pm? Will he use his good offices to move it more closely to 7 pm, as much business is being lost?

Mr. Baker: I shall draw my hon. Friend's comments to the attention of the chairman of the Post Office. He will appreciate that such details are for the management of the Post Office. If my hon. Friend is worried about help to industry, he will agree that the announcement today by the chairman of the Post Office that the increase of 1p for first class mail is to be held down to only ½p is a direct contribution by this successful enterprise to reducing the burden of costs on industry.

Dr. John Cunningham: Will it not become necessary for the Post Office to have more capital expenditure if it is to improve the rate of mechanisation—and, therefore, productivity—and the quality of service to its consumers, to develop new services such as datapost and to speed up the modernisation of the massive number of rural sub-post offices? Does the Minister agree that if sub-post offices are not modernised they will not be able to offer customers the services that they want and will therefore be likely to come under a threat of closure?

Mr. Baker: I should like to emphasise once again that the Post Office's capital expenditure for this year and next is at the highest levels ever. I take those remarks ill from an hon. Member who supported the Labour Government under whom the Post Office's capital investment programme was about £30 million a year. Next year it will be £130 million.

Malaysia and Singapore

Mr. Durant: asked the Secretary of State for Industry if he will pay official visits to Malaysia and Singapore to discuss further industrial co-operation.

Mr. Patrick Jenkin: I have no plans to go there at present.

Mr. Durant: Does my right hon. Friend agree that that part of the world is extremely important to high technology industries in the United Kingdom? Does he agree that my right hon. Friend the Foreign Secretary's recent statement about students' fees will create a better atmosphere there? Does he agree that this is a good time to make an effort in that area? Will he reconsider his decision about sending a Minister there?

Mr. Jenkin: It is not for me to send Ministers, but I agree with everything else that my hon. Friend said. He will have seen reports in the press this morning of the remarks that were recently attributed to the Malaysian Prime Minister about the marked improvement in relations between Britain and Malaysia and the possibility of Dr. Mahathir Mohamed visiting Britain shortly. I am utterly persuaded of the importance to our commercial effort of the best possible relations with Malaysia and Singapore.

European Regional Development Fund

Mr. Knox: asked the Secretary of State for Industry what is the value of the grants allocated to England from the European regional development fund since its inception.

Mr. Patrick Jenkin: A total of £209·6 million has been allocated to England from the quota section of the European regional development fund since its inception in 1975.

Mr. Knox: Does my right hon. Friend agree that that is a significant sum and that the grants bring considerable advantages to Britian? Is he satisfied that the general public are aware of the extent of the assistance from the European Community?

Mr. Jenkin: No, I am not satisfied about that. We must continue to redouble our efforts to bring home to the British public just what are the advantages to us of membership of the Community, especially with regard to regional policy. The Government and local and other public authorites take all practical steps to ensure that the grants are widely publicised. For example, we erect signboards at project sites and publish details in British Business. Nevertheless, I accept that we must do more.

Mr. Stoddart: Is it not a fact that the sum given by the Secretary of State is chicken feed compared with what is needed by our regions? Would it not be much better if we used our money for this purpose rather than paying thousands of millions of pounds to the EC for the regional development that is badly needed in Britain?

Mr. Jenkin: Without doubt, membership of the Community has brought substantial advantages to Britain. Our trade with the community has risen half as fast again in the past 10 years as our trade with the rest of the world. Millions of jobs in Britian now depend on that business. If the Opposition's policy of withdrawing from the Community were ever put into practice, it would be disastrous for Britain.

Mr. Skinner: Being in has been a disaster.

Mr. Wigley: Will the Secretary of State confirm that application has been made to extend the use of this aid to inner city areas in England? If that is so, will there be further finance from the EC, or will existing aid be spread more thinly?

Mr. Jenkin: I have noticed the questions that the hon. Gentleman has tabled on the subject. I cannot usefully add to the full and helpful answers that he has received from my hon. Friend the Under-Secretary of State for Industry.

Mrs. Kellett-Bowman: Does my right hon. Friend agree that the substantial regional development fund grants to which he has referred are made infinitely more effective by the large sums that we receive from the European Investment Bank? Is he aware that small firms are especially pleased with the recent scheme to make that money more readily available to small firms at low rates of interest?

Mr. Jenkin: I agree with my hon. Friend. I should tell the House and small firms that the recent change in rules allows those firms to benefit from those funds, even though firms are not in the regional areas. The availability is now national.

Mr. Edwin Wainwright: Is the Minister satisfied with the amount that is coming from the regional development fund? If so, what contribution have the Government made to supplementing it in Yorkshire and the north-east, where it is badly needed because of high unemployment?

Mr. Jenkin: We always wish to see a better return from the European regional fund. Part of our purpose has been to seek to amend such things as the common agricultural policy so that there can be a more even distribution of the burden and the benefits of membership. With regard to the allocation of funds to the different regions, large parts of Yorkshire benefit from regional policy. I hope that the hon. Gentleman recognises that.

Industrial Location (Inquiries)

Mr. Campbell-Savours: asked the Secretary of State for Industry how many industrial location inquiries have been directed to his Department's northern regional office, north-western regional office and the Invest in Britain Bureau, respectively, over the past 12 months.

Mr. Norman Lamont: In 1982 the Department's north-east regional office handled 187 location inquiries, and the north-west 254. Over the same 12-month period, the Invest in Britain Bureau handled some 440 inquiries from foreign-owned companies where there was a likelihood of an eventual investment decision.

Mr. Campbell-Savours: Will the Secretary of State or the Minister carry out the fullest possible investigation into the arrangements for handling industrial locational inquiries originating from the United States of America? Is the Minister aware that the Northern Ireland Office can sift through those applications prior to their being forwarded to the north-west regional office of the Department of Industry or the northern region? That happens because most of our officials in the consulate and embassy in the United States of America are funded out of the Northern Ireland Vote and not the Department of Industry's Vote. Will the Minister make the necessary changes?

Mr. Lamont: I shall look into the hon. Gentleman's point. If he wants to give me further information, no doubt he will.

Mr. Andrew F. Bennett: From the figures that the Minister gave in his original answer, can he tell us how much development took place as a result of each of the inquiries processed?

Mr. Lamont: All that I can tell the hon. Gentleman is that under section 7, £16 million-worth of assistance has been offered, which is expected to preserve over 4,500 jobs in the north-west and to create nearly another 4,000 jobs. In Cumbria, £1½ million is being spent, which will preserve over 300 jobs and create almost 200 jobs.

Manufacturing Industry

Mr. Chapman: asked the Secretary of State for Industry if he will make a statement on the competitiveness of British manufacturing industry as measured by unit costs and output per man-hour in the past three years.

Mr. Patrick Jenkin: Following several years in which United Kingdom manufacturing industry lost competitiveness, since the first quarter of 1981 it has improved by 24 per cent. Between 1979 and the third quarter of 1982 output per man-hour has improved by 10·1 per cent. Those trends are encouraging.

Mr. Chapman: I welcome that dramatic reversal in the trend of uncompetitiveness, which was entered into in the last half of the 1970s. Will my right hon. Friend confirm that that augers well for Bitish manufacturing industry as the world recession ends? Does he agree that so long as the Government allocate subsidies to industry it is better to allocate them to creating new jobs in new expanding industries than to use them to prop up and preserve uneconomic jobs in dramatically declining manufacturing industry?

Mr. Jenkin: I cannot dissent from my hon. Friend's general proposition. Unfortunately, in the real world of politics it is not always easy to adhere to that, tout court. I agree that the trends are encouraging, but there is still some way to go before we can recover the competitiveness that we had in 1975.

Mr. J. Enoch Powell: How is the factor of exchange rates eliminated from the comparisons to which the Minister has just referred?

Mr. Jenkin: The changes in the exchange rates are included in the figures that I have given. It is important to make sure that the benefits endure, by keeping hold of costs. That has not happened when the pound has been devalued previously. The benefit that comes to industry through having a lower exchange rate has been lost as costs have risen to absorb that benefit. We must make sure that that does not happen this time round. That will be to the benefit of British industry recovering its share of the markets both here and overseas.

Mr. Orme: Why is the manufacturing sector in such a crisis? The Minister must know. Like him, I travel round the country visiting many major companies, which tell me the same story. Since 1979 there has been a disaster. In many cases firms have lost half their employees. I visited Lansing Bagnall, a major vehicle company, last week. It has lost over 2,500 employees. One cannot complain about unit costs of production at a firm such as that. Why is there such a crisis?

Mr. Jenkin: The right hon. Gentleman should have come with me when I visited the TI Raleigh company in Nottingham on Friday. That company is bent on putting its house in order. It is recovering its share of the market, restoring its profitability and has introduced new models. It is introducing new production methods. I give it three hearty cheers.

Microcomputers in Schools

Mr. Greenway: asked the Secretary of State for Industry whether he is satisfied with the progress of his Department's microcomputers for schools programme; and if he will make a statement.

Mr. Kenneth Baker: The progress is good. We have provided 6,400 microcomputers to secondary schools. As far as we can judge, every secondary school now has one; we are the first country to achieve this. The primary school scheme began in October last year. So far 6,500 schools

have applied out of the 27,000 eligible. Including Europe, the United States and Japan, we are leading the world in the impact we are making on education through the use of microcomputers. This is good news for the future of our young people and of Britain as a whole.

Mr. Greenway: I am sure that the whole country will join me in congratulating my hon. Friend on that progress. [Interruption.] Will his Department look at the provision of microcomputers in special schools? Some expense is involved because the computers have to be adapted to the needs of disabled children. However, it is important to remember that equal opportunities will be given to disabled people through the use of those computers. Can something be done for them?

Mr. Baker: I thank my hon. Friend for his comments. I was surprised at the grudging way in which the Opposition welcomed the good news. There is no doubt that microelectronics applied to disabled or handicapped children can result in considerable improvements. We are sponsoring several experiments in special schools to ensure that those developments come through and are widespread.

Mr. John Garrett: Does the Minister ever visit the schools that are on the receiving end of his microcomputer scheme? Does he find, as many others do, that the Department of Education and Science has undermined the scheme by refusing to provide extra money for software or training? No head teacher will pay for software or training when the money comes out of the capitation allowance for the school, which is being cut. He will not buy software if the children will have to share books.

Mr. Baker: I visit schools frequently. I assure the hon. Gentleman that I do not receive such comments. The Department of Education and Science allocated £9 million and has just announced that it will increase that sum. From our budget we have allocated an additional £500,000 for educational software.

Robotics Industry

Mr. Sheerman: asked the Secretary of State for Industry what steps he takes to encourage the establishment, to assist the growth and to ensure the survival of the British robotics industry.

Mr. Kenneth Baker: The Government provide financial assistance to United Kingdom companies to develop and manufacture new types of robot and to United Kingdom companies to install robots. We also support consultancy studies for robotics. Grants totalling over £8 million have so far been offered by my Department for those purposes.

Mr. Sheerman: Does the Minister accept that many of us believe that this is part of a public relations exercise on the high tech side, while, at the same time, most of British industry is falling to pieces? Is he aware that Remek, one of the leading and largest robotics manufacturers in Britain, based in Milton Keynes, is now in the hands of the receiver and that some people have argued that the Government neglect British robotics and encourage only joint Japanese ventures?

Mr. Baker: I disagree with what the hon. Gentleman has said. A few years ago only two or three companies in the United Kingdom were capable of making robots. There


are now 15. There are about six joint ventures between Japanese and British companies and American and British companies. This is not a PR exercise. I want to extend the use of robots and robotic devices throughout British industry. That will help to make it more competitive.

Regional Policies (Review)

Mr. Dormand: asked the Secretary of State for Industry if he will make a statement on the progress being made on the review of the Government's regional policies.

Mr. Norman Lamont: Officials of the Departments concerned have completed the first stage of the review, which was to examine the working of current regional economic policies and identify ways in which they might be made more effective. We now have to decide what further work we may want to commission. I should like to emphasise that there will be no further substantial changes in the lifetime of this Parliament.

Mr. Dormand: Is the review a cover-up for yet another attack on regional aid? What possible justification can there be for the proposal in the public expenditure White Paper to cut regional and general industrial aid by 21 per cent.? Will the Minister give an assurance that before any conclusions are reached he will consult organisations and local authorities in the regions concerned?

Mr. Lamont: We consult local authorities and other people involved in the regions on regional policy all the time. I have already said that no further changes in regional policy are planned in the lifetime of this Parliament. But, having said that, it is perfectly reasonable that the Government should review regional policy and its effectiveness, about which there is a lot of argument and controversy.

Mr. Hal Miller: Does my hon. Friend agree that under current criteria the west midlands would qualify for assisted area status, so that he is faced with the choice of either including it or reviewing the policy? In that review, will he pay particular attention to the creation rather than the diversion of jobs—which many suspect the current policy encourages—and the cost-effectiveness of regional policy as a means of assisting industry?

Mr. Lamont: The criteria, of course, include geographical position and access to markets, too, and not just levels of unemployment. I entirely agree with my hon. Friend that cost-effectiveness, and, indeed, the effectiveness of regional policy, are the very things that inevitably any Government must look at.

Mr. Prescott: Does the Minister agree that the only principle that seems to govern the Government's attitude to a review of regional policy is how to reduce the areas given grants and thus save money? Are they not the overriding considerations? Will the Minister tell us that in considering the review of regional policy he will seriously think about the effective role that the Labour-controlled councils, such as the GLC, the west midlands and Manchester, and smaller local authorities, play in creating jobs, some at a cost of only £250 a job and not the £40,000 a job, which is quoted from the Conservative Benches on occasions?

Mr. Lamont: Unfortunately, some of the jobs safeguarded in the public sector by Labour-controlled authorities have been at the expense of jobs in the private

sector. The hon. Gentleman talks about cuts in regional policy. We have simply narrowed the area covered by regional policy schemes, which must make sense if they are to be effective. It makes no sense for regional policy to cover nearly half the country. RDGs in 1979–80 were £330 million, in 1980–81, £490 million and in 1981–82, £616 million.

British Telecom (Report)

Mr. Eggar: asked the Secretary of State for Industry if he will make a statement on Professor Littlechild's report on British Telecom.

Mr. Kenneth Baker: have nothing to add to the statement that I made last Monday, which has received a wide welcome.

Mr. Eggar: Is my hon. Friend aware that the report is particularly welcome for the clear and concise way in which it sets out the options? However, is there not a danger that the RPI minus x formula, which in many ways is the key recommendation of the report, assumes that BT at present has an appropriate level of efficiency and, what is more, that there will not be significant cost reductions in equipment? Should there not be reserve powers for either the Director General or the MMC to look into the cost structure of BT if necessary?

Mr. Baker: As I am sure my hon. Friend appreciates, this is a most complicated matter, on which we have already spent 25 hours of debate in Committee. I assure him that there will be opportunities for the Director General of OFTEL to examine the cost structure of certain of the charges of BT.

Computer Software Industry

Mr. Richard Page: asked the Secretary of State for Industry what assistance is currently available from his Department for the computer software industry.

Mr. Butcher: The software products scheme can provide grants of up to one third of the cost of developing and launching software products. The scheme was relaunched last year with an additional £10 million funding. I am greatly encouraged by the response from industry. In addition, we are continuing to look at ways in which the public sector may draw upon the considerable talent available in the United Kingdom software industry.

Mr. Page: In thanking my hon. Friend for that reply, may I ask whether he is satisfied that enough of that aid is going to the smaller software houses and through them into the smaller businesses, which need the aid to compete?

Mr. Butcher: As with industry in general, often many talented people are contained within our smaller companies. There is no restriction precluding the smaller companies from taking advantage of the scheme. The major criteria are an application area and type of software product and not so much company size.

Mr. Campbell-Savours: Would not the computer software companies also benefit if the enterprise allowance employment premium—the manpower subsidy introduced by the Government last year to run for six months—were extended to those companies and to all other companies throughout the whole of the United


Kingdom in the way that the Department of Employment and the Manpower Services Commission were suggesting only a few months ago? Will the Minister put pressure on the Department of Employment to ensure that the scheme is extended?

Mr. Butcher: The scheme has to stand on its own merits and each application must be looked at on its merits, regardless of location within the United Kingdom or whether the company or the region in which the company is located receives special grants. I shall examine Hansard, and, having clarified the position further, see whether I can meet the hon. Gentleman's point.

Service Industries

Sir Anthony Meyer: asked the Secretary of State for Industry if he will seek to extend assistance under the Industry Act 1972 to service industries.

Mr. MacGregor: Assistance is given to service industries through several schemes set up under the Industrial Development Act 1982, which consolidates the Industry Act 1972 and amendments, including for example, under the office and services industry scheme, the coal firing scheme and the small firms loan guarantee scheme. A considerable number of service industries have already benefited from the last mentioned scheme.

Sir Anthony Meyer: Is it not now becoming increasingly clear that, even if there is a major upturn in the world economy, manufacturing industry will not be able to provide many more jobs and that they will have to come from the service industries? Is not the time coming to switch resources from manufacturing industry into the service industries, including, in particular, tourism?

Mr. MacGregor: As my hon. Friend will know, tourism is aided through other schemes. I have said that there are a number of service industries that will benefit under the Act. I agree with my hon. Friend that a major source of new jobs will be the service industries. I think that he may have in mind regional development grants, but there are problems about extending them to service industries generally. For example, one must be careful that assistance to one firm is not simply displacing activity by another in the same area. There are also problems in that many service industries are less flexible in the choice of location.

Mr. Wigley: Is not that point equally valid for manufacturing industry? May not grants given to one manufacturing concern displace jobs in another area? Has not the time come to look at service and manufacturing industries together and get a new structure of grants, recognising that many more jobs in the future will be available in service industries rather than in manufacturing?

Mr. MacGregor: I have heard what the hon. Gentleman says. That argument has been put forward by a number of people. Regional development grants were designed to increase capital investment and, on the whole, capital expenditure has taken place on a much wider scale in manufacturing than in service industries.

Mr. Robert C. Brown: In view of the disappointing reply that the Minister of State gave to question 16, would the Under-Secretary of State read the debate on the northern region last week and consider what was said about small businesses, particularly in the service sector?

Mr. MacGregor: I do not need to read it. I listened closely to the entire debate. As I said, I entirely accept that small firms will be a major source of new jobs in the future. That is why we are concentrating a large number of schemes and other forms of assistance on small firms. Nearly all of them apply to the service sector as well as to manufacturing.

Information Technology

Mr. Warren: asked the Secretary of State for Industry when he expects to come to a decision on the proposals of the Alvey report on a programme for advanced information technology; and if he will make a statement.

Mr. Kenneth Baker: As my hon. Friend is aware, the Alvey report proposes an investment by Government and industry of £350 million. Investment on this scale will determine the course of a very significant proportion of the IT industry's research activities. It is therefore imperative that the decisions that we take now are the right ones. For this reason, we have consulted widely with the industries. In the light of these and other consultations we are considering our response to the report and I hope to make an announcement shortly.

Mr. Warren: Does my hon. Friend feel that his time for response should be of the same order as that taken by the committee to produce the report? Does he appreciate that other countries are moving ahead extremely fast and that a response is urgently required by our industry?

Mr. Baker: I am as anxious as my hon. Friend that we should reach a decision quickly on this very important programme. As it is the largest co-operative research programme that this country has ever tried, I must consult industry and indeed other Departments. Those consultations are now coming to an end.

Oral Answers to Questions — ATTORNEY-GENERAL

Historic Documents

Mr. Christopher Price: asked the Attorney-General what is the Lord Chancellor's policy in considering applications by Ministers to withhold historical documents beyond the 30-year period.

The Attorney-General (Sir Michael Havers): The Lord Chancellor considers applications on their merits in the light of the provisions of section 3(4) of the Public Records Act 1958 and in the light of the policy laid down by section 5 regarding closure after transfer. In considering applications under section 5 of the Act the Lord Chancellor has regard to these provisions and the criteria set out in paragraph 26 of the White Paper "Modern Public Records".

Mr. Price: May we know more about the criteria? What possible sense is there in relating all the Foreign Office intercepts that took place during the second world war while refusing to release those that took place between the first and second world wars, with the exception of those that Lloyd George took away and placed in the House of Lords Library? Is it not reasonable to assume that the years between 1919 and 1939 are now history?

The Attorney-General: I understand the hon. Gentleman's great interest in this matter. The matter has


been considered with great care, especially with regard to second world war intercepts. The arguments for exempting security and intelligence-related records from public release have less weight in relation to records of interceptions of messages transmitted by the services of a country with which the United Kingdom was then at war.

Mr. Newens: Is there any truth in reports that public records dealing with the British Union of Fascists are likely to be witheld for the full 100 years? Bearing in mind that attempts were made a few years ago to withdraw certain Metropolitan police records relating to the hunger marches of 1933 and 1934, which were later countermanded, is there not a case for great vigilance in these matters to ensure that too many exceptions to the 30-year rule are not allowed?

The Attorney-General: This is very carefully supervised. The matter raised by the hon. Gentleman falls within the responsibilities of the Lord Chancellor, but I will certainly write to the hon. Gentleman about it.

Shoplifting (Sentencing Policy)

Mr. Campbell-Savours: asked the Attorney-General if the Lord Chancellor has any plans to meet the Magistrates Association to discuss sentencing policy for shoplifting offences.

The Solicitor-General (Sir Ian Percival): As was indicated in the replies to my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) on 9 June 1980 and 9 March 1981, meetings are not arranged with the Magistrates Association to discuss sentencing policy limited to a single type of offence.

Mr. Speaker: I should make it clear that in future I shall not call hon. Members unless they stand up. Does the hon. Member for Workington (Mr. Campbell-Savours) intend to ask a supplementary question?

Mr. Campbell-Savours: Does the Solicitor-General accept that people under stress and the mentally ill should not be threatened with prosecution or brought before the courts for sentencing on shoplifting charges? If the right hon. and learned Gentleman has any sympathy with that principle, will he ensure that all police forces are required to appoint persons qualified to assess the degree of stress or, indeed, whether the person concerned is mentally ill?

The Solicitor-General: I am sure that most prosecuting authorities are well aware of those considerations. There is no question of any special threat being held over the heads of the mentally ill or anyone else. The threat is the same. The greatest safeguard in this respect is the availability of legal aid and advice so that those appointed to assist people may take account of these points in their defence and see that full weight is given to them, either before prosecution is undertaken by making representations to the authorities, or, if there is a conviction, in mitigation before the court passes sentence, which is the point to which the main question relates.

Mr. Arthur Davidson: As a fair proportion of those prosecuted for shoplifting are elderly first offenders, do the Attorney-General's new guidelines on prosecuting policy contain clear advice to prosecuting authorities on the advisability of cautioning rather than prosecuting? Does the right hon. and learned Gentleman agree that the sense of shame and disgrace for the elderly first offender far outweighs any penalty that the court may impose?

The Solicitor-General: I entirely agree with the hon. and learned Gentleman on the last point. Anyone appearing at a police station or court for the first time, but perhaps especially an elderly person, may become thoroughly confused. We all want every assistance and indulgence to be given in such cases. Cautioning is indeed referred to in the document mentioned by the hon. and learned Gentleman. It is also referred to in another document, which will soon be available and which I believe will be of interest to the hon. Member for Workington (Mr. Campbell-Savours)—a report of the Home Office standing advisory committee on the prevention of crime. The difficulty is that cautioning can be administered only if the accused makes a clear admission of the offence. That limits its usefulness, but that does not alter the fact that whenever it is available and useful it must be considered very seriously.

European Court of Human Rights

Mr. Marlow: asked the Attorney-General how many cases he has conducted before the European Court of Human Rights.

The Attorney-General: None. I have conducted one case before the European Commission of Human Rights.

Mr. Marlow: Is the court competent to judge cases concerning the discrimination in the level of grant available to individual adult students on the basis of something outside their control; in other words, parental income? If it were to pass judgment on this, has my right hon. and learned Friend any idea what that judgment would be?

The Attorney-General: An application of that kind would not be within the convention.

Mr. English: Would it be a good idea to have a European attorney-general or public prosecutor who, through a modest amendment of the convention, could prosecute any intentional breach of human rights committed in any state party to that convention?

The Attorney-General: I note that suggestion with interest.

Mr. Christopher Price: Did the Attorney-General conduct the Government's defence in the case, which I believe is still before the European court, concerning telephone tapping? If the judgment goes against the Government, will he guarantee to put down an amendment to the Police and Criminal Evidence Bill currently before the House?

The Attorney-General: I have learnt from hard experience that it is always unwise to answer hypothetical questions.

Jurors

Mr. Chapman: asked the Attorney-General if the Lord Chancellor is satisfied with the criteria for reimbursing loss of income and expenses to jurors.

The Solicitor-General: The Lord Chancellor is satisfied that the criteria are generally fair in so far as it is possible without giving rise to an excessive charge on public funds.

Mr. Chapman: Following a constituency case, the details of which I sent to the Lord Chancellor, will my


right hon. and learned Friend consider sympathetically the case of an unemployed man seeking employment who is called for jury service and thus denied the opportunity to attend an interview for a job? Is there not a case either for loss of income considerations or for not requiring such a person to be called for jury service?

The Solicitor-General: I gladly respond to the first part of the question. I shall certainly look sympathetically at that case. I should like to consider the details with the Lord Chancellor and write to my hon. Friend.

Care Proceedings (Legal Aid)

Mr. Meacher: asked the Attorney-General if he will make legal aid available to parents in respect of care proceedings regarding their children.

The Attorney-General: My noble and learned Friend the Lord Chancellor made clear the Government's intention in this respect on 17 June last year. A further statement will be made shortly.

Mr. Meacher: Is it not intolerable that this absolutely necessary measure that was enunciated in the Children Act 1975 and promised again under the present Government is still not implemented because of arguments over cost? How can the Government find the money to compensate people for closed shop episodes up to 10 years ago that are

now over and done with and yet not find the money for legal representation for parents threatened with the removal of their children here and now?

The Attorney-General: A considerable amount of consultation has been necessary, together with other considerations. However, as I have told the hon. Gentleman, a statement will be made shortly.

Mr. Lawrence: Will my right hon. and learned Friend take cognisance of the fact that the view expressed from the Opposition Benches is not confined to that side of the House?

The Attorney-General: Yes, Sir. I appreciate that.

Mr. Arthur Davidson: Why has there been such a delay? Is it the fault of the Home Office in drawing up the rules? Is it the fault of the Department of Health and Social Security or of the Lord Chancellor's Department? As the Attorney-General will know, the Law Society is most anxious that a date for the implementation of this necessary decision should be announced very soon.

The Attorney-General: The Government are fully aware of the need that exists and of the distress that might be caused to parents, for example, by the absence of these provisions. There have been a number of necessary consultations and I hope that a statement will be made shortly.

Allied Corporation of America

Mr. Charles Irving: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter related to inhuman and cavalier treatment by a multinational company, one of the top 20 in the United States, namely,
the decision of Allied Corporation of America to create 500 redundancies at its Cheltenham-based factory, Linotype-Paul.
The reason for transferring to its loss-making West German plant the profitable products researched, developed and manufactured by British workers is inexplicable. The House, with your permission, Mr. Speaker, should urgently consider steps that Ministers can take to prevent the appalling exploitation of British companies similar to Linotype-Paul, whose order book is profitable, being moved abroad. There are suggestions of illegal inducements by West Germany to attract British companies, contrary to the Treaty of Rome, to relieve its own failing economy.
The pirating of British products must cease now. Bribery and corruption have many unacceptable faces. As recently as January of this year Linotype-Paul was recruiting staff, most of whom are still working overtime. This leaves the greatest suspicion in my constituency that Allied Corporation of America is by no means whiter than white.
Malpractice should be rooted out and such wealthy groups now seeking oil concessions from the Government refused the opportunity to, yet again, reap rich rewards on the backs of an able British work force.
The matter is specific. Five hundred workers are losing their profit-producing jobs. The matter is urgent and important for those put out of work and for the country in general. The House must, without delay, take measures to ensure that multinationals do not prop up jobs abroad at the expense of British jobs and technology.
The matter comes within the scope of ministerial action, as the Standing Order requires. Ministers must protect British industry from abuse. My right hon. Friends the Secretaries of State for Energy and for Industry must immediately consider carefully whether Allied Corporation of America is a proper company to receive oil concessions when it treats its British work force with such

contempt. There is no probability that the matter will be brought before the House by any other means. I therefore ask you, Mr. Speaker, to rule that this is a proper matter to be discussed under the terms of the Standing Order.

Mr. Speaker: The hon. Gentleman gave me notice before 12 o'clock midday that he would seek to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the decision of Allied Corporation of America to create 500 redundancies at its Cheltenham-based factory, Linotype-Paul.
As the House knows, applications under Standing Order No. 9 that relate to redundancies and unemployment always cause me a considerable amount of difficulty. But the House is also aware that I do not decide whether this matter should be debated. I merely decide whether is of such a character that it must be debated either tonight or tomorrow.
Under the Standing Order I am directed by the House to take into account the several factors set out in the order but to give no reasons for my decision. I must rule that the hon. Gentleman's submission does not fall within the provisions of the Standing Order, and therefore I cannot submit his application to the House.

STATUTORY INSTRUMENTS, &c.

Mr. Speaker: By leave of the House I shall put together the Questions on the three motions relating to statutory instruments.

Ordered,
That the Wildlife and Countryside (Definitive Maps and Statements) Regulations 1983 (S.I., 1983, No. 21) he referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Town and Country Planning (Public Path Orders) Regulations 1983 (S.I., 1983, No. 22) be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Public Path Orders and Extinguishment of Public Right of Way Orders Regulations 1983 (S.I., 1983, No. 23) be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Archie Hamilton.]

BUSINESS OF THE HOUSE

Ordered,
That Private Members' Motions be not proceeded with at this day's sitting; and the Motions of which notice has been given for this day may be proceeded with in accordance with the provisions of paragraph (7) of Standing Order No. 6 (Precedence of Government Business) on a future day.—[Mr. Archie Hamilton.]

Water Industry (Dispute)

Mr. Gerald Kaufman: I beg to move, That this House do now adjourn.

Leave having been given on Thursday 10 February under Standing Order No. 9 to discuss:
The dispute in the water industry.

Mr. Kaufman: The union that sponsors me as a parliamentary candidate amalgamated three months ago with the General and Municipal Workers Union. I am now, therefore, a candidate sponsored by the General, Municipal, Boilermakers and Allied Trades Union and very proud to be so.
Today, the first ever national water strike enters its fourth week. It is a strike that has caused hardship to scores of thousands of our fellow citizens and serious inconvenience to millions more. It is a strike which, if it continues for much longer, could create great hazards for the health and well-being of the whole country. It is a strike that must speedily be brought to an end on honourable terms. It is a strike in an industry which hitherto has known good industrial relations, with a public-spirited work force represented by responsible trade unions. It is a strike which should never have begun and which need never have begun.
The trade unions presented their claim on 21 September. They asked for an increase on the basic wage linked to the going rate and a settlement that would recognise the comparability of their jobs with those of workers in other industries such as gas and electricity. In a statement on 13 October the National Water Council declared that
there is no issue between the employers and the trade unions which cannot be resolved by negotiation and collective bargaining in the usual way.
Seven weeks elapsed between the lodging of the claim and the time when the employers were ready to hold talks. The unions arrived at the headquarters of the National Water Council at 10.30 am on 11 November, ready for what the National Water Council called
negotiation and collective bargaining in the usual way.
They were kept waiting for four hours until 2.30 pm, yet, when finally they met the employers, they were greeted with an absurd offer of 4 per cent. on the basic wage and nothing in recognition of comparability, and not by any willingness to negotiate, but by an immediate demand that the claim be taken straight away to arbitration because, according to the National Water Council, it
could not be accommodated within the water industry negotiating machinery.
It may be that that extraordinary response by the employers affected the unions' subsequent attitude to arbitration.
What had caused that extraordinary change in the employers' position between October and November? I can state categorically that the employers had been willing to negotiate with the unions up to an offer of 6 per cent. Why, then, did they not negotiate in that way? The answer is that on the very day of the intended negotiation the right hon. Member for Bridgwater (Mr. King), now the Secretary of State for the Environment, told the negotiating group of the National Water Council that it must offer no more than 4 per cent. He put intolerable pressure on the negotiating group to conform to his wishes, and it did so.
The right hon. Gentleman's interference has been documented repeatedly in such newspapers as The Daily Telegraph, the Daily Express, the Daily Mail, The Economist, The Times and The Sunday Times. It has never been denied, because it cannot be denied. It took place on the day when the Prime Minister had the brazen nerve to tell the House:
I understand that negotiations with the water industry are taking place today. The Government are not a party to them."—[Official Report, 11 November 1982; Vol 31, c. 666.]
Yet at the very moment when the Prime Minister was speaking those words to the House, the reckless and highhanded interference of the Secretary of State was leading directly to the strike that we are debating.
After that day there was no contact again between the employers and the unions until just before the strike began on 24 January. The employers increased their offer, but no settlement was reached.
Through the good offices of ACAS, which has struggled hard to bring about a resolution of the dispute, a mediator was called in. That mediator's report was issued on 23 January. It recognised fully that the workers in the water industry had what it called
a deeply held sense of grievance
which, it said, should receive
an understanding, positive and determined response
as a matter of great urgency. But it also said that the workers' claim for comparability with the gas and electricity workers could not be met, not because there was no merit in that claim—indeed, paragraph 4 of the mediator's report documented in detail the merits of the claim for comparability—but because, as the mediator said in paragraph 6 of his report,
conditions in the labour market have changed to an unparalleled extent as large scale unemployment has made its impact on terms and conditions of employment … Thus, I consider the water workers—through this adverse movement in relative position—to have been the victims of wage inflation elsewhere in the economy, on the one hand and the recession, on the other.
So the mediator was saying that the admitted merits of the workers' claim had been made irrelevant because of the mass unemployment created by the Government. That is what the mediator's report says, and I have quoted the words.
On that criterion, genuine wage bargaining might as well come to an end, because the just claims of a group of workers providing a vital service have been invalidated by Tory monetarist policy.
The Minister who has presided over this unprecedented level of unemployment, the Secretary of State for Employment, made matters worse by insulting and reviling the major union involved. He alleged that its members had gone on strike in violation of their rule book. That was quite false. Indeed, the union had taken a ballot beyond the requirements of its rule book to ensure full consultation with the membership and had received overwhelming support. If the right hon. Gentleman had got 74 per cent. of the votes in an 81 per cent. poll he would be very happy to come to the House on that basis.
The Secretary of State for Employment claimed that there was a long trail of agreements that had been entered into voluntarily and ruthlessly broken by the unions concerned. That allegation was false as well.
Under successive Governments, the Ministry of Labour and the Department of Employment have had at their head Ministers who have regarded it as their function to conciliate and to heal. That was how Conservative occupants of the post such as Sir Walter Monckton and


Mr. Iain Macleod saw their role. Dedicated civil servants who served Ministers such as they must view with revulsion the debasement of his high office by the loutish bully boy who now occupies it.
The Secretary of State for Employment has been abetted willingly by the Prime Minisiter herself. In the middle of the dispute, speaking at a dinner in Glasgow, she lectured the water workers on their obligation to abide by what she called "a puritan work ethic". The most appropriate comment on that sanctimonious piece of preaching came in a leading article in the Daily Express, which said that
it was surely a blunder for her to use a glittering function, with diamonds atwinkle, to direct sharp words at sewage workers.
So, in an atmosphere embittered by the Prime Minsiter and her colleagues, the strike proceeded. Attempts by the unions to resume negotiations resulted in a meeting on 6 February at which the employers tabled proposals listed on one sheet of paper. There was much anticipation of what the meeting might produce, because, on the radio three days before, Mr. Len Hill, the chief employers' negotiator, had said that water workers could look forward to a package that would add at least £5 to £10 a week in productivity gains to the offer then on the table of 7·3 per cent. over 16 months.
When the proposals were examined it was found that, averaged across the industry, the increase available was about 50p a week. But in fact nearly half of the work force would have got nothing, while 14,500 of the 29,000 workers in the industry could have expected about 80p a week, with appreciable increases available to precisely 120 of the 29,000 workers, or four-tenths of 1 per cent. of the total. That was the grand bonanza calculated to end the dispute.
Last week it emerged that the employers had found that they had added up their sums wrongly. There were reports that the 7–3 per cent. offered over 16 months was really worth 8·5 per cent.—or was it? The Daily Telegraph clarified the matter by reporting:
Differing figures for water rises 'all correct.
A Water Council spokesman improved the shining hour with this explanation:
We claim there was never a mix-up anyway.
No wonder ACAS said last week in a statement:
Expectations raised by certain statements made to the media by the employers, and subsequently dashed, have not made the negotiations easier and have prejudiced the prospects of a settlement.
No wonder that the Prime Minister's favourite newspaper, The Sun, put the matter with its customory elegance when it said in a leading article:
What a shower of wets are in charge of the water industry! It is difficult to imagine anyone making a bigger mess of pay negotiations.
I have great sympathy with the employers' negotiators. They are honourable men. Left to themselves, they would have reached a negotiated settlement months ago. The culprits are pinpointed in that same leading article in The Sun, which states:
The farce began last November when a six per cent. offer had to be withdrawn because it did not have Government approval.
Sir Robert Marshall, whom the Secretary of State ejected from his post as chairman of the National Water Council, said recently that the Government's interference in the affair had created an impossible negotiating position. It is impossible for employers to negotiate

sensibly when they are harried and harrassed by Ministers, and when they are even called in and instructed on how to conduct an extremely expensive propoganda campaign.
The Government have always had it in their power to enable the dispute to be sensibly brought to an end. Sir William Dugdale, the present chairman of the National Water Council, said frankly that
when Governments want disputes settled they want disputes settled … if you elect a Government they call the shots, and I'm a loyal servant of every successive Prime Minister who I work for. If they say do this I endeavour in my humble way to deliver it".
The Secretary of State has become a great advocate of arbitration in the dispute. His Cabinet colleagues were not such devotees of that procedure during the National Health Service and Civil Service disputes. They flatly turned down arbitration and would have nothing to do with it. Of course, one problem is that the Government are completely unwilling to play any active part in bringing the dispute to a speedy and honourable conclusion. As we know, their contacts with the employers have been mainly to urge them to be recalcitrant. They have had no contact at all with the unions.
During the three years and nine months since May 1979, neither the present Secretary of State nor his predecessor have once met the unions in the water industry to discuss its problems and prospects—not even when a major reorganisation of the industry had been embarked upon. Most people would think that the Government would have wished to consult the workers representatives about the reorganisation, yet there was no prior consultation at all. Indeed, it has been the Opposition who have sought to maintain a dialogue with all those involved in this vexed dispute—the unions, the employers and ACAS.
The unions have declared that they wish to have the problems of their industry considered by a third party. They have discussed with ACAS the possibility of establishing an independent inquiry. Talks to help bring about such an inquiry proceeded throughout the weekend. The key issues have been the terms of reference of the committee of inquiry and the attitude of the parties to its outcome. The Opposition have been in close contact with developments, and during the past few hours I have spoken to all the parties involved. As a result, I can tell the House that I believe that, with good will, it might be possible to resolve the dispute speedily.
The trade unions said last Wednesday that had the employers been willing to proceed to an inquiry the dispute could have been settled within a matter of days. It could have been settled by today. Both sides have now agreed to a committee of inquiry under the auspices of ACAS. The unions are willing to go to the inquiry without conditions. They have given assurances committing themselves to the resolution of the dispute by that process. Those assurances have been given by all the unions concerned and represent their committed view. It is the employers who are laying down conditions which, if insisted upon, could jeopardise the inquiry proceeding to a speedy conclusion.
With good will, it could be possible to proceed quickly to set up the committee of inquiry. The trade unions are ready to be forthcoming in a manner that would be of great assistance—

Mr. Tony Durant: I have listened closely to the right hon. Gentleman's speech. He


obviously feels that he is in close contact with the trade unions. Will he say whether they will honour any agreement that is forthcoming? Will they honour its terms without question?

Mr. Kaufman: I shall repeat the words that I have spoken with great care today. The unions are willing to go to an inquiry without conditions. They have given assurances committing themselves to the resolution of the dispute by that process. Those assurances have been given by all the unions concerned and represent their committed view—[Interruption.] Do Conservative Members not want a settlement? If they doubt the good word of the trade unions, that is in line with the way that they have neglected them and the way in which the Secretary of State for Employment has insulted them during the past months.
I repeat that the trade unions are ready to be forthcoming in a manner which I believe will be of great assistance. The Secretary of State must tell the House that the National Water Council will be similarly forthcoming. If he does not, he and it will carry a heavy responsibility. If he does, and seeks to match the efforts of others, important progress could be made.
I hope that what I have said today will help to lead to a speedy settlement of this vexed dispute—[Interruption.] If that is the attitude of Conservative Members, they will carry the responsibility if the dispute is not resolved.
There has been some disposition to write off the workers' action as ineffectual and to say that the country can continue indefinitely despite the action. I reject that view. The only reason why exceptionally disturbing consequences have not already occurred is the unions' code of practice, which places great stress on avoiding action that prejudices public health and safety, and requires them to make every effort to avoid banning the health of consumers.
Because the unions have carefully adhered to that code, the strike has been far less effective than it might have been. It is the Prime Minister's puritan ethics in practice. Even so, the water system is deteriorating day by day. More people are being deprived of their water supply and many more cannot be sure of its purity. The pollution in rivers is causing great anxiety.
I hope that what I have said today will help to bring about an early and honourable settlement and that industrial relations in the water industry will return to where they were before the Secretary of State's dangerous intervention three months ago.

The Secretary of State for the Environment (Mr. Tom King): I wish immediately to pick up a comment made by the right hon. Member for Manchester, Ardwick (Mr. Kaufman) in his closing remarks. He said that some people were writing off the industrial action as ineffectual. I want to make it clear to the House that I am certainly not one of them. People are, at this moment, standing on icy paths, with buckets in their hands and possibly at frozen standpipes. It does not, therefore, behove the House to say that the action is ineffectual. I regard it as extremely serious. Many people are affected by it—whether by lack of proper water supplies, by the need to boil water as a precaution or by the deterioration of the quality of effluent and sewage works. I regard each of those as serious consequences of the action.
I welcome this emergency debate, and I say to the right hon. Gentleman—because I do not believe that this is a day for spending all our time scoring political points—that I accept the second part of his speech as a genuine attempt by him to approach a difficult problem. I hope that our debate today, in the time provided, will offer a serious opportunity to address serious issues, and that it will not be seen as merely an opportunity to score points. The country expects more of us than that.
May I say a word about the general position. The latest information about the number of properties without a mains supply has now risen to around 54,000. That means that about one property in every 500 now has to rely on supply by either standpipe or tanker. There have already been far too many cases of hardship caused to groups of people who are least able to look after themselves. About 7·5 million people are now advised to boil water intended for human consumption. In some places, this is because chlorination has stopped; in other places, it is as a precaution. The water authorities will continue to monitor closely the quality of water put into supply. Wherever there is the slightest reason to doubt the quality, precautionary measures will be taken. In a small number of areas, the cessation of normal chemical treatment has led to water authorities reporting higher levels of lead. Where such a problem exists, there is close monitoring, and full advice is given to protect consumers.
So far, the effects on industry and agriculture have been relatively small, although I know that for some—farmers and some industries—it has posed real problems. Some firms have been asked to reduce consumption, and others have had to take special measures to overcome shortages in supply. There have been a very few closures. The effect of the deterioration in sewage effluent has been modified by the dilution of higher river flows, but while some streams are polluted, there have been no serious effects yet on rivers. However, there have been one or two incidents where it is feared that pollution has killed fish.
To a large extent, the limited impact of the strike reflects the considerable effort of many workers in the water industry who have made exceptional efforts to maintain supplies and level of service. I pay tribute to the management and staff of the water authorities and water companies who have worked so hard over recent weeks. I want to say, with all the authority that I can from this Dispatch Box, that the best tribute that the public can pay to them for those efforts is to give the greatest attention to economy in water use at present. The House will be aware of the words of the chief executive of the Thames water authority, the largest water authority in the country, and I hope that those words will be heeded both in that area and throughout the country.
I also want to thank the manual workers who, in spite of the strike, have recognised their obligation to safeguard public health and safety and who have carried out a number of emergency repairs. Without in any way derogating from what I said about the people who have helped, I should add that there have also been a number of serious examples of hardship and distress. Those examples have been caused by what I would call rather narrow and unfortunate arguments about the exact extent of emergency cover. In my view, it is not acceptable for union officials to threaten or carry out the withdrawal of emergency cover—to which they are committed under their national agreement—from people who are quite


unable to defend themselves. I hope that a spirit of generosity will be shown in the interpretation of such events.
I shall now describe the sequence of events in this dispute—which the right hon. Gentleman also sought to trace—that have brought us to where we are today. First, I want—not to correct him, because I am sure that the right hon. Gentleman sought to put the matter into the correct context—to remind the House that the issue of what is called the upper quartile, the top quarter of average manual earnings, is not something that suddenly arose with the presentation of this year's pay settlement. The issue has been around for a considerable time. Early in 1982, as part of the last pay settlement, it was agreed between the trade unions and the employers that there would be talks, without commitment, and on a basis of mutual benefit, about improving the relative position of manual workers' earnings. I hope that the House will note carefully those words. The trade unions and the employers met on three occasions to discuss this matter in the summer of 1982. The unions made proposals for parity with the upper quartile of manual earnings. The employers put forward counter-proposals for increases in earnings, in return for specific agreements on changes in working practices, and other cost savings. They rejected the demand for upper quartile parity. No progress was possible in those informal discussions. Already in September—the House will note this—there were press reports of
increased militancy among members of the GMWU and a new readiness among its leaders to take industrial action over pay this year.
That was last September.
At the third meeting in September, the unions tabled their full pay claim. The unions then combined their aspirations to rise to the top 25 per cent. of manual workers, with a claim for increases relating to their annual pay settlement, due in December. The employers undertook to consider the claim and to respond at the next agreed meeting of the National Joint Industrial Council in November, in accordance with normal procedure. The union response was to call a one-day official strike. That took place on 21 October. It was the first official strike ever to take place in the water industry. It occurred more than six weeks before the settlement date.
In November, the employers responded to the initial claim with a pay offer of 4 per cent. Following the rejection of this offer by the unions, the employers, in accordance with the National Joint Industrial Council constitution, proposed to refer the differences to arbitration. The unions refused, despite the national agreement, clause 12.
Early in January, the trade unions called for a ban on overtime, and then an all-out strike. Immediately before the strike began, the Advisory, Conciliation and Arbitration Service contacted both sides and agreed a procedure to resolve the dispute. Copies of this agreement are in the Vote Office. The House knows that this agreement was signed by the chairman and secretary of both the employers and unions, and witnessed by Mr. Lowry, the chairman of ACAS.
Moreover, Mr. Lowry wrote on the same day to both sides, making clear the various points in the agreement, so that there could be no possible ambiguity. Copies of this letter are also in the Vote Office. The agreement provided for negotiations in good faith under an independent chairman. A chairman, Mr. Buchanan, was appointed by

ACAS, with the agreement of both parties. It was agreed that when the chairman was satisfied that proper negotiations had taken place, and if there was still no agreement, he could then intervene, in the role of a mediator, with proposals for a settlement. The agreement also stated that if this stage did not result in a settlement recourse should be had to arbitration. It was agreed that the arbitration should be in accord with the NJIC agreement, to which both sides had previously subscribed.
To underline the nature of the agreement, the chairman of ACAS, Mr. Lowry, wrote to both sides making it clear that in the circumstances of disagreement either party would have the right to seek arbitration and the other would have the obligation to respond. As I said, copies of the letter, which will be familiar to many right hon. and hon. Members, are in the Vote Office.
In the discussions which followed under the independent chairman, Mr. Buchanan, the employers increased the pay offer, first to 5 per cent. and then to approximately 5·8 per cent. No agreement resulted and the independent chairman, in accordance with the agreement signed by both sides, assumed the role of mediator. After listening to the arguments in some detail, he made three specific recommendations.
First, he did not support any increase to bring water workers into the upper quartile of the manual workers national earnings scale. He recommended against any increase that would restore the relative position of water workers in the earnings league to some previously prevailing position. Secondly, he recognised the strength of feeling on the part of the water workers about their wage position and recommended both sides to explore, and rapidly proceed to implement, possibilities for increases in earnings opportunities. He referred to administrative efficiencies by moving to the payment of wages by credit transfer and to the development or extension of the performance-related bonus schemes. Thirdly, the mediator recommended an increased offer of 7·3 per cent. to be effective for 16 months. He also proposed to more than double the long service supplement, for which 65 per cent. of manual workers qualify.
Within 24 hours of the mediator's report the employers accepted the recommendations and made an improved offer to correspond to the proposals in the report. However, the unions then rejected the mediator's report. That, as was also clear in Mr. Lowry's letter which hon. Members will have read, was not binding upon them. Subsequently, they rejected the improved offer by the employers for increased productivity earnings which, of course, occurs under paragraph 8.
The unions were asked for, but were not able to make, any proposals of their own for cost savings that could lead to increased earnings. They made no proposals for changes in working practices that might earn such productivity payments. However, that is not the end of the story because Mr. Lowry's procedure, and that of ACAS, specifically allowed for the possibility of failure to agree at that stage. The ACAS agreement had also contained a specific clause acknowledging that the procedural rights and obligations set out in the NJIC's constitution would be respected. Clause 12 of that constitution gives both parties in a dispute the right to evoke the final stages of the procedure—arbitration—as a last resort.
I have quoted to the House before an important sentence from Mr. Lowry's letter but I make no apology for


repeating it. The third sentence of the clause deals specifically with the possibility of arbitration as the final stage in the procedure. Mr. Lowry went on to say:
In the absence of any intervention by either side when I was making these points the parties have signified their agreement with them.
Therefore, the employers formally requested the referral of the dispute to binding arbitration.
On 9 February the unions said that they would not accept arbitration. Instead, they sought a non-binding committee of inquiry. Not unexpectedly, given the experiences of recent weeks and months, that was not acceptable to the employers. They had seen the agreed procedures rejected, the constitution ignored, and they had been subjected to severe industrial action. In those circumstances, the House will understand why the employers are most anxious to see that any further stage in the dispute will be entered into on the clear understanding that the findings of either an arbitrator or an inquiry must be accepted by both sides.

Mr. Dennis Skinner: The Minister says that the decision of the committee of inquiry must be binding. Does he recall that when, in 1972, the last Tory Government took on the miners the Wilberforce inquiry was set up, to deal with matters quickly. The NUM did not accept the terms of the inquiry. As a result of the findings of that inquiry—which were not bad; they were the best that the union had had for some time—the union went along to 10 Downing street and knocked out of Ted Heath another dozen concessions. Any union worth its salt would not accept the terms of an inquiry beforehand because if it did the inquiry's judgment would be based upon that. Therefore, it is in the union's interest not to accept the terms beforehand, just as the NUM did in 1972.

Mr. King: If I thought that the conduct of responsible union leaders in Britain was dictated by the hon. Gentleman's attitude I would be very worried indeed. I worked in industry all my life before coming into the House. I worked in the printing industry, which is hardly a non-union shop industry, and I was well trained by many union leaders who drove some hard agreements with me. However, it was made clear that once those agreements had been made they took a pride and responsibility in seeing that they were honoured.
I have in my hand the national agreement for the water industry—the terms and conditions of service. I am sure that the hon. Gentleman will have read clause 12, as I and, I hope, most hon. Members have. I hope that on reflection it will be seen that it is necessary that that should be followed.

Mr. Den Dover: Will my right hon. Friend explain to the House why the unions rejected binding arbitration and are asking for a committee of inquiry?

Mr. King: I shall come to that in a moment.
I have now made four statements to the House about this dispute. In the last three, on 1 February, 3 February and 10 February, I said that there were two options to achieve an end to the dispute and to secure an immediate return to work. The first option was to follow the mediator's recommendations. The second was to honour the agreement through ACAS and to follow the terms of the national agreement by going to arbitration. If the first

is not acceptable—that is a judgment that must be reached by both parties—the second remains. That provides a sensible procedure for resolving the dispute and it should be honoured.
I want to put the dispute and the issues around it in the context of the present. The House will have noticed that on Friday the Chancellor of the Exchequer announced that the current rate of inflation is 4·9 per cent.

Mr. Skinner: Temporarily. It will not be soon.

Mr. King: The offer at present before the water workers as recommended by the independent mediator is 7·3 per cent. over 16 months. To those 65 per cent. with long service that is equivalent to an offer of 8 per cent. That is against what I do not think it would be a distortion to describe as a union claim of the order of 20 per cent. That rather gives the lie to the somewhat facile comment that I have heard in some places that an opening offer of 6 per cent. would have saved all this trouble.
I, as well as any hon. Member, can understand a comment that was made by Mayor John Lindsay of New York who, on one occasion, found himself faced with a sewerage workers' strike. He was asked whether he thought it was good for his personal reputation to stand up vigorously for the rights of the New York people against what was thought to be an unreasonable demand. The mayor made the fairly perceptive comment that no one would come out of a sewerage workers' strike smelling like a rose.
In this situation—whether it be the Government, the Opposition, the water authorities, the unions, the people who are suffering hardship and distress, industry, people whose jobs are now threatened, firms that may close never to reopen, the general consumer or Britain's reputation—all of us have something to lose and all of us have a stake in seeing the dispute settled at the earliest possible opportunity. It threatens jobs, health and safety, future employment and the security of many people. It also threatens the important position of ACAS, which was set up by the previous Labour Government and which is supported by this Government. It is faced with a very difficult problem.
The dispute has not become unnecessary. Whatever other figures have been challenged, the figures that I am about to give have not been challenged and reveal an average increase for those concerned of more than £10 a week. Given the economic and industrial world climate, that is a not unreasonable offer. The value of that offer is very real to the water workers, and they, as well as pensoners and everyone else, have an interest in ensuring that inflation does not rocket up again as a result of a series of higher and higher claims.

Mr. Les Huckfield: rose—

Mr. King: The proposal has been made by an independent mediator. He is not some fly-by-night mediator whom no one has ever heard of. Today I checked on Mr. Buchanan and asked how many other arbitrations he had done. I am told that between 1972 and 1981 he carried out no fewer than 66 arbitrations. I assume, therefore, that he must have been continuously acceptable to the unions. Thus, 66 arbitrations proved acceptable, but sadly the sixty-seventh proved unacceptable.
However, that is not the end of the matter, because there is another procedure for settling the dispute. The


crucial factor is that that procedure is not being followed. On Friday, I was asked on "The World at One" whether the unions were dishonouring their agreement. I hope that the House will concede that I have sought at all stages and in my statements to the House not to inflame the situation, but to find a way in which this damaging dispute could be sensibly resolved. I did not accept that question. I do not regard the agreement as being dishonoured, but in my judgment, and that of the vast majority of people, it has not yet been honoured. It is important that it should be honoured at the earliest possible opportunity.

Mr. Leslie Spriggs: Will the right hon. Gentleman now answer the charge which was put to him by my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) that he stopped the offer of six per cent.?

Mr. King: The stories that I have read suggest that I said that four per cent. and nothing more could be offered. I think that the House knows that on that first day of negotiation the offer was four per cent. and almost immediately—perhaps within an hour, although I do not know the exact time—the employers decided, on their own initiative, to offer arbitration once it had been made clear to them that that offer was not acceptable. They were familiar with the background of the dispute and with the long-standing problem over the upper quartile and decided that the gap was so enormous that arbitration was the most sensible way to proceed.

Mr. Denis Howell: rose—

Mr. King: I should like first to reply to the very important and constructive point that has been made. The right hon. Member for Ardwick has made a constructive effort—which I take at face value—to resolve this difficult problem.
Obviously ACAS is more than willing to help to resolve this difficult problem. I have made it clear that we believe that the national agreement should be honoured. Indeed, I draw the attention of the House to its wording. It deals with the first point raised by the right hon. Member for Ardwick, and states that the difference should be referred to ACAS, or to any other agreed tribunal for arbitration. That is contained in the national agreement and that is the position on which we stand. As the remaining part of the sentence states, a settlement must be on the basis that any award made in relation to the difference is accepted by the two sides and is treated as though it were an agreement between the two sides.
Different forms of words may be conjured up and they may or may not sound more or less the same, but the issue that must be faced is whether that form of words will be accepted. We can continue with semantics and clever legal phrasing, but the real question is whether those agreements are accepted, whether the agreement will now be honoured and whether the findings will be accepted.
That is the right way to proceed. The terms of the national agreement were, I am sure, signed in good faith by union representatives, just as I am sure that they signed the agreement witnessed by Mr. Lowry on 21 January in good faith, and that must be honoured. The problem is difficult, but it is high time that the water workers stemmed their loss of earnings—and the losses are becoming very substantial—and that the dispute was

ended for the health of the industry and its tradition of service, and for the health of the country and its dependence on proper and efficient water supplies. That is the way forward. That agreement provides a route to the solution of the problem. My earnest plea is that the position should be sensibly considered and that this serious dispute should be resolved at the earliest possible opportunity.

Mrs. Shirley Williams: I very much welcome this debate. As you know, Mr. Speaker, I pressed for it several times earlier last week and during the previous week. I welcome the debate for two reasons. First, as the Minister and the right hon. Member for Manchester, Ardwick (Mr. Kaufman) have said, we are daily running the risk of fatalities as a result of the effect of the dispute on public health. Only today one of the water industry's senior managers said that he prayed every day that there would be no fatalities in his region because of the pollution of the rivers. Secondly, the industry has been marked for many years by extremely good relations between the unions and management. It is a tragedy that this industry should today be marked by growing suspicion and distrust between the two sides.
The House has been given two somewhat partial accounts of the events that led to the breakdown of negotiations in the water workers' dispute. I have no interest to declare, but it must be said—if we are attempting to be fair—that the employers did themselves no good by implying that increases of £5 to £10 per week would be available to the water workers over and above the 7·3 per cent., and by subsequently revising the mathematics of their offer to show that it was not 7·3 per cent. but 8·5 per cent. Understandably, those two admitted mistakes by the National Water Council have led to a growing lack of confidence in its ability to negotiate sensibly and aptly.
I noticed how carefully the Secretary of State avoided directly answering the question raised by the hon. Member for St. Helens (Mr. Spriggs). He must recognise that the National Water Council's decision last October to make an offer of 6 per cent.—which was considered for several hours and which was about to be made to the water unions—was suddenly changed to an offer of only 4 per cent. That change is widely believed to have been due to the Minister's intervention.
I do not blame the Minister, because he happens to be a member of a Government who consistently say that they do not believe in any public sector incomes policy, but who have one in practice. We all know that they have one. It is to make public sector income settlements match an unwritten norm. The Labour party must also admit that the unwillingness of the unions to abide by an agreement which they have signed, in conjunction with the chairman of ACAS, will make such arbitration agreements the subject of great distrust.
One must acknowledge that there were faults on both sides, but the unions—despite the distrust which I recognise existed and which was held in their minds—should have been willing to carry out the terms of the agreement which they signed.
The Minister referred to the talks last summer between the National Water Council and the unions. They dealt with productivity and whether efficiency measures could be taken which would benefit the manual workers and have


corresponding benefits for consumers and managers. The talks were about comparability. The Minister said—and he was telling the truth—that the unions decided to end the talks. But he left out an important fact—on 7 July the Government announced the disbandment of the National Water Council and said that they would no longer require the services of the then chairman, Sir Robert Marshall, who had the confidence of both sides. The Minister did not mention that, but it was a significant reason for the breakdown of the talks. It is time that it was said in the House that there were faults on both sides and that those faults led to a lack of trust and to the present bad relationships.
I believe that five steps would bring an end to the dispute. I say to the right hon. Member for Ardwick that the obvious duty of anyone who wishes to speak seriously in the House on the matter is to be in touch with both sides. Like him, I have been in touch. That is no great deal. It is the minimum that any hon. Member would do. I stress that on both sides of the House hon. Members want nothing more than to see the dispute honourably settled.
The first step is to set up a committee of inquiry acceptable to both sides. I understand the Minister's support for arbitration, but one must admit that that is not likely to be acceptable to both sides now. A committee of inquiry would have to work as quickly as the committee of inquiry into the complicated steel dispute three years ago, which completed its study within two days.
Of course, secondly, there must be agreement on the committee's terms of reference. It is clear that the terms must include an examination of comparability, because the water unions feel strongly that they have the right to bring that issue before a committee of inquiry. The terms of reference should also include consideration of productivity and of flexible working, which the employers have brought to the fore. Thirdly, I hope that the Minister, or the Under-Secretary of State, will repeat in this debate that there will be no interference of any kind by the Government with the employers' evidence or with the findings of that inquiry. That would be helpful. I believe that a formula under which both sides would agree to honour the inquiry's findings and recommendations might bridge the gap between the two sides, if I understand their positions correctly.
I say, lastly, to the Labour party and trade union representatives that I hope that if we have an independent committee of inquiry, which will report quickly, the unions will find it possible to resume work or, at the very least, to accept full emergency cover with no question of its being withdrawn in any part of the country.
The House should take full note of two lessons from the dispute. The first is that our water and sewerage system is in a desperately frail condition. Hon. Members will have seen in The Times this morning the estimate that the cost of repairs required as a result of the failure to maintain the system for nearly a month will almost certainly exceed many times the full cost of the union's claim. That does not mean that the union's claim should be conceded in total. It shows how near the edge our water and sewerage system now is.
The system is kept going by dealing with collapses, emergencies, mains bursts and broken sewers. Because of unwise economies in recent years, the system has not been subjected to any planned modernisation schemes. The

National Water Council believes that about £100 million more investment a year is the basic minimum needed to keep the service at a reasonable standard for public health.

Mr. Skinner: The right hon. Lady was a Minister for 10 years and did nowt about it.

Mrs. Williams: There has been a drop of 36 per cent. in water investment since 1979, and the hon. Member for Bolsover (Mr. Skinner) should know that.

Mr. Skinner: Hypocrisy.

Mrs. Williams: The hon. Gentleman does not understand facts.
I underline the following facts. The electricity workers have made a claim for a substantial pay increase and for shorter hours. Local government manual workers only this morning rejected a 4·5 per cent. settlement by a ballot showing a vote of 3:2 against the proposal. Coming fast down the track is a major crisis for the Government in public sector pay.
I conclude with a few words to each side. To the Government, who are pretending that there is no incomes policy for the public sector, I say that they are doing neither the Government nor the country any good. There is a public sector incomes policy. It would be better if it were brought out into the open and if attempts were made to reach binding agreements, with arbitration, and with a formal recognition of the Government's interests.
To the right hon. Member for Ardwick I say that when he quoted the mediator's report he underlined paragraph 6, but failed to draw the conclusions from it. The mediator said:
I consider the water workers through this adverse movement in relative position, to have been the victims of wage inflation elsewhere in the economy and of the recession, on the other hand.
There is no disagreement about the recession. If the party to which the right hon. Member for Ardwick belongs believes that the comparative position of the water workers has worsened as a result of wage inflation elsewhere in the economy, as the mediator said, it is high time that he followed the logic of his own argument at the Dispatch Box and recognised the need for an incomes policy.

Mr. Tony Durant: I intervene briefly to to make one or two points. I followed the speech of the right hon. Member for Crosby (Mrs. Williams) very closely and I should like to put one point to her. If she wants large-scale investment in the water and sewerage industries, which I agree is necessary, she cannot have it both ways. Where will the money come from? One cannot necessarily have higher wages and greater investment. That is the problem facing the industry.
It is an important industry. All of us are concerned about the strike and are worried about its continuation. We hope that a settlement can be achieved as soon as possible.
There is some confusion in the press about water workers and sewerage workers. I should like to point out that about two thirds of sewage processing is carried out by local government manual workers who are not involved in this dispute. Therefore, we are discussing the water workers and not necessarily the sewerage workers. The right hon. Member for Manchester, Ardwick (Mr. Kaufman) quoted the Daily Express. I think the Daily Express got it wrong when it quoted the sewerage workers.
My constituents cannot understand why, when a mediator with whom both sides agreed to meet, came to a figure the unions did not agree to it. As this was agreed by both sides, why did they not go along with it?
The Government have an interest in wages. There is no point in our pretending that the Government have no interest in local government or national Government workers. The Government have such an interest because they are involved in the financial aspects of these industries and they must make some reaction to the negotiations. It is not surprising, therefore, that the Government have some interest in the matter. Wage levels are crucial to inflation, and the Government set out as their main plan the combating of inflation.
I have many dealings with private industry in which, today, most settlements are running at 2½ per cent. The people in those industries, some of which use large quantities of water, feel a little put out by the fact that they are prepared to settle at 2½ per cent. because of general national circumstances, while other workers in safe and reliable jobs are offered 7·3 per cent. but are not prepared to settle. They find that worrying and puzzling and ask why they should be expected to settle at 2½ per cent.
Not everyone in the union favours the strike. Chaps in the industry who want to go back to work have been in touch with me this weekend. They said that the only reason why they are not prepared to go back to work is that the industry is a closed shop. They have been threatened that if they go back to work they will lose their cards and their jobs. The last phrase they used to me was "We want to go back to work." That is another aspect that must be considered. Is it right that those people should be forced to go on strike when they do not want to?
We have seen reports in some of the newspapers about the use of contractors. It would be helpful if the House knew the exact legal position. In a report today, The Daily Telegraph said that, according to Lord Denning, it is legally permissible to use contractors. It would be helpful to know the legal position.
The use of a strike weapon by an industry of this type is out of date. By now we should be solving these problems more sensibly. Who does the strike hurt? It hurts not the employers but the old and the sick and young families. The water workers are hurt because they immediately lose money. Some of them have mortgages, children and so on. They are equaly vulnerable.
I urge the unions to consider whether it is time to go back to work, and to take the committee of inquiry as a basis of discussion. I intervened during the speech of the right hon. Member for Ardwick, who appears to have been in close touch with the unions today, who implied that the unions would accept the findings. I have before me today a document sent by the National Water Council to all hon. Members. I shall use its words rather than my own. Under the heading "Arbitration", it states:
During the negotiations the Employers have asked for arbitration on three separate occasions in accordance with the National Agreement. The Trade Unions have steadfastly refused this. Instead they have offered a court of inquiry but have not committed themselves to its findings.
I received the document today. I cannot act on any more than that, although the right hon. Member for Ardwick seemed to imply that the unions might accept the findings. We ought positively to know the answer. If we are to go to the great trouble of an inquiry, it should be binding on all parties or there is no point to it.
I urge the workers to take this matter seriously, to go back to work and to settle the matter through a proper, well-run inquiry.

Mr. Reg Race: We have today heard some extraordinary speeches from right hon. and hon. Members. The Government have only themselves to blame if the water workers do not trust their words. After all, this is the first Government in the history of this country who have managed to engineer a strike in the water industry. It is the first time ever that this group of workers has been on strike. The Secretary of State should reflect on that, because it is of significance.
The most significant part of the dispute is the way in which the Government have intervened in the negotiations and the discrepancy of view between the employers and the trade unions on whether serious and proper negotiations have taken place. We know, not from the unions, but from the National Water Council through its former chairman, that it was, Ministers who telephoned to tell the water council to reduce the offer that was to be made.
Relationships in the industry between employers and the trade unions have traditionally been cordial. Trade union negotiators have consistently argued that relationships with the employers were better than elsewhere in the public sector and that there was a certain degree of trust between the trade union and employers' sides, a trust which was broken by the Government's intervention last October and November when they instructed the National Water Council to reduce the offer that it was to make and which it had intimated it was going to make. That prejudiced the negotiations.
The Secretary of State told us today that the employers asked for binding arbitration very shortly after the 4 per cent. offer was made. They asked for binding arbitration after their first offer. What they were really trying to do was to suggest that there was a small difference between their position and that of the trade unions. There was not a small difference between the positions at that stage, because the trade unions had submitted a claim for comparability with the gas and electricity workers, a claim which had not been properly dealt with over a number of years. Therefore, there was a substantial difference between the two positions.
Both at that time and since the trade unions have argued that, because of the Government's intervention, and because of the failure of the employers to deal properly with the issue of comparability with gas and electricity workers, the negotiations had not been properly and seriously conducted by the employers. That is why the trade unions have consistently said that they are not prepared to go to arbitration and have a restriction placed on the issues that the arbitrator can consider.

Mr. Anthony Beaumont-Dark: rose—

Mr. Race: If the hon. Gentleman will allow me to develop this point, I shall give way in a moment.
What is crucial is that arbitration has been asked for on a number of occasions by the employers, but the trade unions want all the relevant factors to be considered. An arbitrator might simply consider the labour market conditions in this country. He might not consider very


seriously the employers' ability to pay. The water industry is highly profitable. When trade unions are establishing a claim for an improvement in wages, they consider the employers' ability to meet the claim. We know that over the past year the employers made profits amounting to £189 million. Therefore, the industry's ability to meet an increase in the wages paid to its workers is extremely high—

Mr. John Townend: rose—

Mr. Race: —especially when we consider that labour costs are a small proportion of the industry's total costs.

Mr. Beaumont-Dark: Is the hon. Gentleman aware that, according to the published figures, the water workers have done better than the miners and local government workers over the past three years, and marginally better than gas and electricity workers? The water workers are not hard-pressed employees who keep on falling behind. Does the hon. Gentleman agree that they are trying to shove and push themselves to the top at a very difficult time?

Mr. Race: As usual, the hon. Gentleman does not know what he is talking about. Average earnings in the water industry are lower than the national average for manual workers. The hon. Gentleman is wrong. Gas, electricity and water workers are all previous employees of local authorities and until 1974 they had virtually the same rates of pay. Since then, major differences have been created and the electricity and gas workers have had increases which have been substantially more than those achieved by the water workers.

Mr. John Townend: rose—

Mr. Race: No, I shall not give way. I want to pursue my argument.

Mr. Skinner: The hon. Member for Bridlington (Mr. Townend) has 12 directorships.

Mr. Race: The costs of settling the dispute would be microscopic compared with the Government's public sector borrowing requirement and in terms of consumers' bills. It has been estimated that settling the claim in full would cost an extra ½p a day for the average family. The overall cost of the claim is only £40 million, and the industry's profits were £189 million. It is absurd that we have reached the position where the Government are saying to water workers that they cannot have a modest increase in pay this year and, in effect, that they would prefer the workers to go on strike. It seems that the Government want a confrontation.

Mr. Beaumont-Dark: Is 20 per cent. a modest claim?

Mr. Race: The hon. Gentleman should remember that the water workers have lost ground since 1979. Like many other groups, they have fallen behind when account is taken of increases elsewhere, especially the increases that have been given to company directors and others over the past few years. I hope that the hon. Gentleman will not forget that during the last election the Conservative party pledged itself to cut taxes for the low-paid and for those on average earnings. Does he remember that during the 1979 campaign the Prime Minister said that it was an article of faith to cut taxes for those people? What has

happened? The hon. Gentleman and his right hon. and hon. Friends have voted to increase taxation for the low-paid. They have increased taxation for those on average earnings. Only those who are on five or 10 times average earnings have seen their taxes reduced. The hon. Gentleman has no real argument. He has voted to increase taxes for the low-paid and for those on average earnings and he should not expect them to do other than try to maintain their living standards. I am sure that he does not expect them to do otherwise.
I am a member of the National Union of Public Employees and I am proud to be sponsored by it in this place. NUPE wants an inquiry into the way in which the dispute has been handled. It wants an inquiry that will consider all the relevant factors and take into account the pay of gas and electricity workers and the ability of the employers to pay. It wants it to exclude from its consideration factors such as the impact of mass unemployment in the market place. If we wish to set a correct rate of pay for the job, it is absurd to tell workers, "You cannot have an increase in pay because all those outside the gate want your jobs and are reducing the value of the work that you do."
The findings of the inquiry should not be binding on both sides in advance. The Wilberforce inquiry's findings were not binding on both sides in advance. Similarly, other industrial relations inquiries' findings have not been binding in advance. If an inquiry is conducted speedily and a conclusion is reached in a matter of days, as is necessary, it is crucial that the National Joint Industrial Council should have the ability to firm up the results at the end and to reach a negotiated settlement. That is a reasonable way of settling the dispute.
We should have in mind the position in which the workers find themselves and the work that they do. The water workers' jobs are not confined to purifying the water that we all drink. These people wade through raw sewage up to their waists to keep the sewers free. They are the people who have to fish out the dead dogs and the dead bodies that are found in the reservoirs. They are the people who maintain the filter beds to produce clean and pure water for everyone.
The Secretary of State showed his ignorance when he told me that the sewerage workers were not really involved because they are local authority employees. The local authority workers are doing the same jobs as the water workers because they are subject to water industry contracts. They are part of the same negotiations. The right hon. Gentleman did not know what he was talking about.

Mr. John Townend: The hon. Gentleman does not know what he is talking about.

Mr. Race: We must recognise the important job that the water workers and the sewerage workers perform for society and ensure that an inquiry is set up as soon as possible. The inquiry should have terms of reference that bring in the factors which the trade unions want to discuss with the employers. We must put an end to the nonsensical view that there have been proper negotiations already.
The ACAS statement has been widely quoted, but one crucial sentence has not been drawn to the attention of the House. It reads as follows:
One party considers that the bargaining has been conducted in good faith and the other does not.


That is the crux of the matter. The employers, on the Government's instruction, have reduced their wage offer. They have placed themselves in difficulties and they have tried to get binding arbitration, but the trade union side does not believe that the negotiations have been free and unfettered, as they have been in the past to a certain extent. They believe that great pressure has been put on the employers by the Government. It is that pressure that has produced the first national strike in the history of the water industry. If anyone is to blame for the present circumstances, I suggest that it is the Government.

Mr. Douglas Hogg: The hon. Member for Wood Green (Mr. Race) reminded us that he is a sponsored member of NUPE. Sponsored Members usually take some care to present an accurate account of the relevant facts. I listened to the hon. Gentleman's speech with some care and I find that his adherence to accuracy must be called into question.
As I understood the hon. Gentleman's speech—some parts of it were quite unintelligible—his principal contention was that the water workers had been treated badly as compared with other workers in the public sector. I expected him to let us have some figures. I expected him to answer robustly when my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) pointed out that he was wholly wrong. When it came to figures and facts, the hon. Member for Wood Green was as silent as he normally is. The reason is that the hon. Gentleman's basic proposition—that the water workers have done worse—is simply untrue. I shall tell the House how untrue it is. The figures are well known and certain.

Mr. Skinner: Is the hon. Member for Grantham (Mr. Hogg) aware that at the weekend there was an illustration of a water worker whose pay packet, based on a normal week's work less tax, amounted to £58·50 for a five-day week? I suggest that that water worker's pay has fallen behind that of Mr. Len Hill who gets £19,000 for three and a half days a week and Sir William Dugdale who gets £30,000 for working for a water authority for four days and who works for someone else on other days. It is certainly less than that of the hon. Member for Grantham who picks up his salary as a Member of Parliament and God knows how many thousands of pounds for working in the courts before he comes here.

Mr. Hogg: I am not surprised by what the hon. Member for Bolsover (Mr. Skinner) has said. He hoped, no doubt, to divert me from giving the figures that I shall now quote. [Interruption.] He obviously hoped that, as a result of his intemperate intervention, I should not embarrass his hon. Friend—[Interruption.] Nevertheless, I assure him that I shall embarrass his hon. Friend.

Mr. Speaker: Order. May I say once again to the hon. Member for Bolsover (Mr. Skinner) that he was heard in silence. The House listened to what he had to say. The least he can do is to show some good manners and listen to other hon. Members.

Mr. Hogg: I shall give the figures for 1979–80. In that year, the average water worker's pay increased by 21·4 per cent., local government employees' pay increased by 13 per cent., coalworkers' pay increased by 17 per cent., gasworkers' pay increased by 18 per cent. and electricity workers' pay increased by 19 per cent. That year was not

in any sense an exception. In 1980–81, water workers' pay increased by 12·3 per cent., local government workers' pay increased by 7·5 per cent., coalworkers' pay increased by 9·7 per cent., gasworkers' pay increased by 12·6 per cent. and electricity workers' pay increased by 12·5 per cent.

Mr. Skinner: What about lawyers?

Mr. Hogg: Nor was 1980–81 an exception. In 1981–82, water workers got an extra 8·8 per cent., local government workers 6·9 per cent., coalworkers 7·4 per cent., gasworkers 7·9 per cent. and electricity workers 7·4 per cent.

Mr. Skinner: What about lawyers?

Mr. Hogg: It is not my purpose to bore the House with a series of figures of this type, but occasionally one has to produce the evidence simply to gainsay the nonsense, the factually inaccurate nonsense, that some hon. Members utter. That simply will not do. The hon. Member for Wood Green should be ashamed of himself, although I suppose he is seeking reselection somewhere.

Mrs. Shirley Williams: Perhaps the hon. Member for Grantham (Mr. Hogg) would discover how to make his remarks compatible with the findings of the mediator, who referred to the relative deterioration of water workers' circumstances since 1979 and said that it provides the basis for a deeply held sense of grievance. How does the hon. Gentleman explain that?

Mr. Hogg: I have no doubt that there is a sense of grievance. Most people would like more money but whether they are entitled to it is quite another matter.
About a fortnight ago, I took the liberty of seeking leave to adjourn the House under Standing Order No. 9 to discuss a matter that my hon. Friend the Member for Reading, North (Mr. Durant) spoke about 10 minutes ago. I refer to the operation of closed shop agreements in the water industry. You, Mr. Speaker, were unable to grant my application. Of course, I have no complaint about that. Indeed, if you had, Mr. Speaker, it might have been a trifle embarrassing for the Government, who had urgent business for that and the next day.
My reason for the application was serious. Since 1975, closed shop agreements have been operating in the water industry. Since 1975, membership of a trade union has been a condition of employment for manual workers. It follows, therefore, that if a trade union member is deprived of membership, he faces the substantial risk of dismissal.
It was made clear to me that a number of my constituents who are members of trade unions and work in the water industry would like to go back to work and accept the mediator's offer but for the fact that they fear for their jobs. They believe that if they go back to work they will be expelled from the union and thus lose their jobs. That would be a terrible act of injustice. I wrote to the chairman of the National 'Water Council, Sir William Dugdale, asking him for a formal undertaking that he would not bring about the dismissal of any employee. I regret to say that he would not give that undertaking. I also wrote to Mr. Bickerstaffe and Mr. Basnett, of the trade unions, asking them to give me an undertaking that they would not bring about the dismissal of any employees. I regret to say that they have not taken the trouble to reply


to my letter. One must take the view that, to put it mildly, a failure to reply is discourteous and, to put it more robustly, is lamentable in the extreme.
The right hon. Member for Manchester, Ardwick (Mr. Kaufman) would do well not to laugh. He may be a good film critic but it does not suit him to laugh when I am talking about the possible dismissal of trade union constituents of mine. Since I raised the subject some 10 days ago it has become more urgent. A substantial number of trade union members in the water industry are working in Lincolnshire. It is clear that the unions are taking, or contemplating taking, disciplinary action against some people who work on the east coast. I strongly fear that the unions will expel those people and then try to procure their dismissal. I would regard such an action as an affront to natural justice. I suspect that such action would be unlawful. It would certainly bring discredit on trade unions, and the House would not be able to overlook the matter.
The trade unions concerned must be aware that to try to procure the dismissal of any employee who tries to exercise his right to return to work would be dreadful and that hon. Members on both sides of the House would deeply resent it. I hope that my hon. Friend the Under-Secretary of State will confirm that the Front Bench of my party agrees.
I shall now deal with hardship. The right hon. Member for Ardwick has complimented the trade unions on their adherence to the code of practice. In many cases they have adhered to it. However, we should not blind ourselves to the fact that, whatever their adherence might be, real hardship is being caused. Hardship is being caused in general to the consumer, who has a tainted water supply or no water supply, to the livestock farmer, who has immense difficulty in keeping his stock alive, and to industry and commerce, where the jobs and salaries of millions are being put at risk. Those are the general consequences. They amount to hardship.
A more particular matter causes me in my constituency role great concern. The village next to mine is Ancaster. Last Tuesday the water main burst. Unfortunately, that prevented water being supplied to premises called Angel Court, which happens to be a warden-controlled group of houses used exclusively by old people. Since Tuesday that group of houses inhabited by old people only has been entirely deprived of water. Local residents, under the guidance of the vicar, have arranged assistance. They have been lugging water across a busy road, where someone was killed in the latter part of last year. That is hardship of a high order. Those people are 70, 80 and older. They cannot put buckets into cisterns. They want their cup of tea. They do not want to be without water. They are old. To try to pretend that that is not hardship of a high order is to deceive the House.
I got in touch with the Anglian water authority. I shall try to persuade it and the unions involved that this is an emergency and that the mains should be connected. I am sure that what is happening in Ancaster is happening throughout the country. Why on earth should old people be injured in that way by trade union leaders? I find it deeply offensive. What is more, I do not believe that ordinary trades union members would try to justify that; my experience of ordinary trade union members in the

water industry is that they are conscientious and hardworking people who would deeply regret those consequences.
I have great respect for those who work in the water industry. I have had the opportunity to go round sewage plants in my constituency. I know that hard work is being undertaken by my trade union constituents. If they were to reflect on the matter a little longer and not be led astray by some people such as the hon. Member for Wood Green, should they bother to listen to him, which I doubt, they would appreciate that the present offer is essentially reasonable. If accepted, that offer would represent an increase of 65 per cent. in the real value of their wages since April 1979, which contrasts with an increase in the RPI of 52 per cent. That is a substantial increase—however one measures it. The workers should bear in mind unemployment in the private sector, the fact that in many areas in the private sector wage settlements have been much lower, and further that what is now an offer is the result of the mediator's determination after due consideration of all the facts. I am fairly confident that if they give the matter unbiased and careful thought they will see the merit in the offer.
I should like the water workers to go back to work straight away. If they feel that they cannot accept the offer, I hope that they will feel able to accept some form of arbitration, whatever its name, which is binding on both parties. I hope that in the meantime they will withdraw their present action and return to work.

Mr. Robert C. Brown: I declare an interest in that I am the secretary of the General Municipal, Boilermakers and Allied Trades Union group in the House of which 16 hon. Members are members. Being a sponsored Member means that my union undertakes to pay 80 per cent. of my election expenses and an annual sum to my constituency Labour party in accordance with the agreement reached with the Labour party under the Hastings agreement.
There are many sponsored Members in the House who are not sponsored by trade unions. The sponsorships are recorded in the declaration of the Members' interests as parliamentary consultancies or as directorships. I say without fear of contradiction that I hope that each Member with such sponsorship can put his hand on his heart and say that there is nothing personal going for him. Let me use an unparliamentary expression and say that the first time that my union demands that I should say or do anything in the House I shall tell it to stuff its sponsorship. I hope that other hon. Members with the type of sponsorship to which I referred would be prepared to say the same. I doubt it.
There is no doubt that the full Whitehall propaganda machine and the frenzy among the political correspondents in Fleet street have been directed against the unions involved in the water dispute, accusing them of tearing up national agreements and refusing to go to arbitration. As those attempts at black propaganda emanate from the office of the Secretary of State for the Environment, it is necessary once again to lay before the House the facts of the dispute and the honourable role played by the unions throughout in trying to find a solution and, further, in response to what the hon. Member for Grantham (Mr. Hogg) said, the honourable role of the workers in the industry who have seen that the least possible hardship has


been imposed on the general public. There is no doubt that, had those workers not taken that attitude, the strike would have bit much harder and earlier. In the area covered by the Newcastle and Gateshead water company members of my union have been breaking the strike to alleviate hardship to groups of old people such as those to whom the hon. Gentleman referred. By contrast, we have had a record of ham-fisted interference by Ministers, and astounding and, at times, tragically hilarious incompetence from the management of the National Water Council.
As long ago as September 1981 the unions first submitted their claim for a restoration of the comparable position of water workers to something approximating that of gas and electricity workers. In the 1981–82 wage settlement it was agreed that that should be referred to a special working party. The unions attended that special working party in good faith. The secretary of the employer's side insisted that the unions should quantify what they meant even before the special committee considered any factual evidence. The unions were reluctant to do so, but eventually put forward a mechanism that would link their wages to the upper quartile.
The discussions in the special working party continued, but suddenly in May they were broken off by the employers. The unions have justifiable reasons for assuming that they were broken off at the behest of Ministers. From then on, industrial relations in the industry regrettably started to go downhill. The incompetence of management and the dictation of Ministers became more and more apparent.
The situation was exacerbated in July 1982 when Ministers announced that the Government intended to abolish the National Water Council and therefore abolish the national agreement in the water industry. That is precisely what the Bill proposes. At that time the trade unions wrote to the Government via the TUC stating:
the Trade Union Sides want to warn the Minister and the public that his irresponsible proposals far from improving industrial relations in what is already a very volatile situation would seriously exacerbate matters".
Since Ministers determined that this year's negotiations would, in effect, be the last national negotiations in the industry there was bound to be a major problem. That was made dramatically more likely by further Government interference. The unions had submitted their claim in September. Item 1 was the reference to the comparability issue and to the upper quartile. Despite the fact that the employers discussed that in the special working party for several months, they threw up their hands in horror. They said that it was a completely new claim and that they would not give a response for a further two months, on the spurious excuse that the unions were introducing completely new matter.
It is well established that at the 11 November meeting the employers were under clear instructions from the Government to offer only 4 per cent. Only a few days earlier the employers had been telling industrial correspondents of the national press that the figure that they intended to offer would be close to the miners' settlement of 6 or 7 per cent. but the Government stepped in and stopped that. All the deliberations since then have not produced an offer from the National Water Council which, if expressed as a 12-month settlement, is as much

as it was prepared to offer back in November had it not been for the Government's interference. That has not been denied by the Treasury Bench.
The trade union side responded to the 4 per cent. offer by consulting its members about the offer and about strike action. In the painstaking consultative process, my union, the GMBATU, received an overwhelming mandate from its members for rejection and for strike action. I believe that it was about 4:1. It was clear before Christmas that there would be an overwhelming rejection. The announcement on 7 January was made by all the unions and confirmed overwhelming rejection, yet there has been no move by the employers or the Government.
The trade union side was therefore forced to name the day for a strike. On the weekend before the strike was due, ACAS provided facilities for reopening negotiations. The agreement on procedure adopted under the auspices of ACAS committed the parties to negotiate in good faith on the earnings league issues. It also provided for the involvement of a mediator.
The mediator reports the offer from 4 per cent. to 7·3 per cent. over 16 months—that is, 5·5 per cent. over 12 months. There were no negotiations whatever on the earnings league issue, let alone negotiations in goad faith. Since Conservative Members keep talking about the national agreement, let them take into consideration the issue of good faith. Good faith has been singularly lacking from the employers and the Government.
The mediator's recommendations have been subject to major distortions by the Government. The mediator found in favour of the unions that a grievance existed, but recommended against the upper quartile mechanism to put it right and against other proposals by the unions on the earnings league. But he asserted that the problem would not go away and should be dealt with urgently. I repeal that the employers refused to negotiate on paragraph 8 of the report. The strike went on.
We then had the completely irresponsible intervention of the Secretary of State for Employment, whose predecessors, as my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) said, always sought industrial peace and harmony. The right hon. Gentleman, in contract, seeks confrontation and union bashing. It was preposterous for him to attack my union as having broken its rules on the strike. It was a lie born out of ignorance and malice. The overwhelming support that the water workers have given the strike shows their overwhelming support for the negotiators' position. To pretend that union democracy has not been observed is a gross calumny and a ludicrous absurdity. I am sorry that the right hon. Gentleman is not in his place. Does he wonder why I accuse him of behaving like an industrial skinhead? That is precisely his attitude.

Mr. Douglas Hogg: I am happy to accept that the hon Gentleman's union tried to ballot its members, but will he accept that in a number of areas, including my constituency, individual members, and whole groups of them, never received a ballot paper or any other form of consultation? Will he see whether that can be put right?

Mr. Brown: I am not prepared to accept that from the hon. Gentleman. I shall find out from officers of my union whether it is so.
Make no mistake. Any hon. Member would be laughing if he could be sure of 81 per cent. of his electorate


voting in a general election and getting 60 or 70 per cent. support from that 81 per cent. The hon. Gentleman and very few of his hon. Friends can expect such support at the next general election.
After two weeks of the strike the employers appeared to move. It subsequently emerged that they had moved further than they were being allowed to by the Government. Len Hill, the chairman of the employers' side in the negotiations, announced via Robin Day, who had not been appointed as arbitrator, following an earlier exchange with Jimmy Young, that if the unions negotiated on paragraph 8 of the mediator's report—something that until then the employers had refused to do—there was, to quote Mr. Hill,
at least another £5 to £10
available to them.
That statement was not only rapidly retracted by the employers' side, but the Secretary of State for the Environment waded in promptly to clarify the statement by the employers' leader. At the same time he continued to assert that the Government were not interfering and had no intention of interfering in the negotiations.
When the employers eventually returned to the negotiating table, rather than £5 to £10, they offered 86p, and to only about half the workers. It was nearly three weeks after the strike began before the employers made any offer relating to comparability or the earnings league, and then it was a miserly 86p for half the work force. It is no wonder that the trade unions consider that there have not been negotiations in good faith on the main point of their claim. The procedure agreements that Ministers constantly accuse trade unions of breaking require negotiations to be conducted in good faith.
The national agreement in the water industry and the procedure agreed via ACAS at the time of the mediators' report both refer to negotiations taking place before we move to arbitration. Apart from the minimal 86p offer, no negotiations have taken place in good faith on the unions' main case. The failure to negotiate is a breach of the spirit of the agreement. In the unions' judgment, it means that the agreement Cannot be invoked to impose compulsory and binding arbitration. In any case, it ill behoves either the Secretary of State or any other member of a Government who have announced the complete tearing up of the national agreement to cite its clauses—wrongly and mischievously in this case—against the trade union side.
Despite that provocation and failure to observe agreed procedures, the unions have sought a way out of this damaging dispute. With ACAS, they have proposed the setting up of a committee of inquiry under ACAS auspices. They have made it clear to ACAS and to the employers for several days, and now to the public, that they are committed to the resolution of the dispute through that process.
I am appalled by the inference drawn more than once by Conservative Members about the good will, honour and integrity of Eddie Newall, my union's national industrial officer, and latterly of David Basnett, the general secretary. The advantage of a committee of inquiry over enforced and ex-parte arbitration is obvious. An inquiry can look at the whole issue and decide it in principle. An arbitration award, particularly one arrived at under the agreement, would have to be set in tablets of stone and applied as though it were itself an agreement.
In calling for a committee of inquiry rather than arbitration, the unions are not attempting to avoid their responsibilities. They, more than any other party, want the committee of inquiry to produce a solution so that the strike can be called off. The strike is costing the strikers, my colleagues in the union, a lot of money. It is also costing the union a lot of money, and it will damage industrial relations in the industry for a long time. We all want a solution. The best solution, given the employees' commitment, a similar commitment from the employers and adequate term of reference, is to set up a committee of inquiry now. It need not take long; the issues are very simple. The committee of inquiry could have been set up in the middle of last week, but it was not. One may ask why. Let us set up that inquiry now so that this damaging dispute can be drawn to a close.

Several Hon. Members: rose—

Mr. Speaker: Order. Before I call anyone else, I should make it clear that it is hoped to begin the winding up speeches at 6.6 pm. Clearly not all hon. Members seeking to catch my eye will be able to be called, but much will depend on the length of speeches.

Mr. David Penhaligon: The nub of the argument concerns the quartile, and I do not see how it can be conceded. It is mathematically impossible to put into the upper quartile all those demanding to be put there. I recall an anxious mother coming to my constituency surgery in a positive rage because the headmaster of the local school had told her that her daughter was of below average intelligence. Thinking to help her, I was foolish enough to tell her that that applied to half the population. I wished that I had never said it, as I spent the next 15 minutes trying to explain what an average was. The quartile argument therefore cannot be conceded.
Some water workers, however, have a good case, because basic rates in the industry are not high. It is not for me to judge the entire pay structure of the industry, but the difference between basic rates and average pay is extraordinary. I believe that workers who have only basic hours and basic pay rates at their disposal have a case. The difference between basic and average rates is such that one wonders who is the highest paid manual worker in the water industry and how much the dear gentleman is actually paid. Simple arithmetic suggests that he must be making at least £10,000 a year. That is not a satisfactory way in which to deal with pay in such an important industry, in which, by definition, round-the-clock working arrangements are required because of the nature of the service.
The Government downgraded the original offer from 6 to 4 per cent. We had an admission of that, or as near as we ever get to an admission, from the Government today. I admire the Minister for not denying it. He did not admit it either, but one cannot have everything. That downgrading of an offer that was apparently willingly made was an unmitigated disaster and the key to many of the problems that have arisen since then. Nevertheless, those who have based all their behaviour on that experience should realise that there is a limit to which any disaster of Government decision-making can be extrapolated to other actions.
The union's refusal to accept arbitration, for example, is quite extraordinary. It is clearly laid down and I see no


reason to suppose that the unions would have done other than rather well out of it. As some water workers have pointed out to me, however, the Government themselves are not always willing to go to arbitration. I argued strongly, and with more confidence than I do now, on behalf of the health workers when the Government refused arbitration on that pay claim, so the Government are not always consistent in these matters. Nevertheless, I believe that the water workers should have accepted arbitration and that their refusal to do so will prove in the long run to have been a mistake.

Mr. King: It depends on what is in the agreements. As I said, this is included in the water industry's national agreement, which is signed by the unions as well.

Mr. Penhaligon: I accept that the Minister had a strong point there—almost strong enough to make up for the fact that he probably wrecked the whole thing in the first place by reducing the offer from 6 to 4 per cent.
As for the effects of the dispute, this is a classic case of the media judging the situation according to what is happening in London. In this instance, very little is happening in London, so the media suggest that the dispute is having little effect, but that is not so in the remoter parts of the country. I estimate that more than 10 per cent. of the houses in my constituency have had their water cut off at some point in the dispute. I understand that half of my home town of Truro is currently disconnected. Malpas is disconnected. Trispen and St. Erme are disconnected, although at the best of times they have water only on a good day when the wind is blowing in the right direction. Perranporth, a substantial town with a population of 4,000, has also suffered disconnection, as has St. Dennis, so at least 10 per cent. of my constituents have suffered disconnection at some time. At present, some will be totally disconnected from the water supply. Moreover, everyone in my part of the country has been boiling water from the outset.
I understand that eight primary schools in the county, most of them at the Penzance end, are today closed. That is a considerable number. The situation in the Penzance area is intolerable. People have been putting up with conditions that amount to far more than merely waiting a few hours for water to be restored. Those living in isolated communities, virtually in what seems like the middle of the Atlantic, experience weather conditions in February that have to be witnessed to be believed. In those communities there are elderly people who have seen no water come out of a tap for several days. The conditions are intolerable. They are the worst of which I am aware in my part of the world, although not necessarily the worst in the country. It is not satisfactory that people in their 70s, 80s, and, in the odd case, in their 90s should be treated in this manner.
It seems obvious that there should be an inquiry—I detect general agreement on that in the House, with varying degrees of emphasis—the result of which should be binding on both sides, and that the unions should agree to resume work.
I have no wish to inflame the dispute, but there are arguments in the area that I represent for bringing in the troops. That is a move which all concerned wish to avoid, because it creates scars and wounds that take years to heal, but the arguments are strong for bringing in troops to those areas where water is unobtainable within three or four miles.
I hope that today's debate will have helped both sides to work off steam. I trust that within hours of this debate there will be news that an inquiry has been established and that its finding will be binding on both sides.

Mr. David Model: This is a dangerous dispute. Almost every hon. Member has mentioned the fact that industry, although it has not so far suffered to any great extent, is on the brink of great difficulty unless there is a speedy settlement and return to work. Such issues as that now before the House are not normally debated by hon. Members. They are transferred to ACAS. I agree that this should be the normal procedure. However, this debate is essential because widespread hardship is being caused. It is incumbent on hon. Members to suggest how a speedy resumption of work might be achieved.
The right hon. Member for Manchester, Ardwick (Mr. Kaufman)—I am sorry that he is not in his place—is aware of the dangers if the dispute continues. The right hon. Member served in a Labour Government that saw Ulster almost collapse in ruins during the Ulster workers' strike in 1974, when essential services were hard hit. The right hon. Gentleman also spent much time trying to sort out the difficulties in British Leyland. There is one looming question that I should like to put to my right hon. Friend the Secretary of State, although lie may not be able to give me an answer today. If the dispute continues, domestic consumers and industry are asking whether they will get a reduction in their water rates. Some water companies say yes and some say, no. The National Water Council has yet to give advice.
Most of the last day before the dispute started was spent arguing over the employers' increased offer. It went up twice. At the last minute, the mediator—all hon. Members share in respect for him—suggested that improved bonus and efficiency payments could provide an answer. It was then probably too late to stop the strike. It is tragic, however, that there have so far not been detailed discussions of the mediator's suggestion of improved bonus and efficiency payments. I have asked previously in the House that the mediator should be recalled quickly to help steer unions and management out of the difficulty on the basis of his recommendation that there could be improvements in bonus and efficiency payments.
In some areas local emergency services are working well. It is a complication that more than one union is involved in the dispute. I should like to ask the unions, as the weather worsens, to have urgent talks with local management to try to lift the hardship caused by the sudden drop in temperatures. Many improvements are needed in industrial relations in the water industry once this dispute is over. That improvement will be hastened if local emergency cover is improved through immediate discussions between management and unions.
The TUC should have been involved earlier in these discussions. If the dispute continues, it will be detrimental to the trade union movement as a whole. In the past, the TUC has intervened to try to achieve a settlement of disputes. Throughout industry generally, in the past few years, management and unions have co-operated excellently in grappling with the severe recession. I wish to see the Government participating in that improved climate which exists in many parts of industry. Where they are an indirect employer, the Government should seek to


build on that state of affairs. If agreement is not possible through ACAS, there is an overwhelming case for early intervention by the TUC. It may be that the TUC is on the verge of intervening, as it is entitled to do under its constitution, off its own bat.
I agree with those hon. Members who have called for a committee of inquiry. I do not believe that the trade unions would have agreed to a committee of inquiry that merely established another inquiry. I do not believe that this domino effect can continue. It is my belief that the unions would abide by the findings. I agree that there is a risk. Often, in industrial relations, there is an element of risk. It is at least worth establishing the inquiry to see what happens. If the unions were unable to accept the findings, I believe that unions in other industries, which depend desperately on an uninterrupted supply of water, would raise the issue through TUC and other trade union channels to insist that the findings of the inquiry were observed.
There has been haggling for weeks over the issue of arbitration. Under section 3 of the Employment Protection Act 1975—the Act which set up ACAS—a matter is not normally sent for settlement to arbitration unless there is agreement by both sides
or unless, in the opinion of the Service, there is a special reason which justifies arbitration".
On an issue where public health is involved it will be necessary for unions and management, when renegotiating arbitration procedures, to examine carefully the backstop role of ACAS. Once the dispute is over, ACAS will have to use section 5 of the 1975 Act which says that it can order an inquiry into
if it thinks fit … industrial relations in any particular industry".
There has been more than enough misunderstanding in this industry to justify ACAS conducting such an examination under section 5.
All hon. Members are aware that the dispute is on the verge of becoming entangled in the pay claims of gas and electricity workers. It is a triple alliance with a difference. I do not fear the old triple alliance because industry has moved on and modernised. However, unless there can be an agreement for handling the problem of a triple alliance of gas, electricity and water challenging any Government, we would be facing great difficulty. It is not necessary to rewrite the Employment Protection Act or to establish a separate inquiry. It is only necessary to fulfil section 4 of the Act under which ACAS may give advice
if it thinks fit, on request or otherwise".
In view of the turn that the dispute has taken, ACAS should give advice to the gas, electricity and water industries to seek improvements under the paragraphs which state:
(c) machinery for the negotiation of terms and conditions of employment, and for joint consultation;
(d) procedures for avoiding and settling disputes and workers' grievances;
and
(k) payment systems, including job evaluation and equal pay.
It is inevitable that these industries are coming together. This would happen whatever party formed the Government. We are moving to a stage where the new triple alliance that provides these vital services will probably start to negotiate together. The sooner that ACAS can give advice on how matters should proceed, the better.
The strike should be suspended at once. I feel that there is sufficient trade union confidence in the good offices of ACAS and in its practical experience for a solution to be found swiftly. We should not add to the distress and difficulty that exists over unemployment, as will happen if the dispute continues. It is incumbent upon hon. Members, ACAS, the employers and the unions to bring about an immediate resumption of normal working, to use the good offices of ACAS and to improve industrial relations generally in the country.

Mr. Les Huckfield: I shall be brief, so I hope that the hon. Member for Bedfordshire, South (Mr. Madel) will understand if I do not take up any of his arguments.
I speak as an hon. Member who is sponsored by the Transport and General Workers Union, which has between 4,000 and 5,000 members working for the various water authorities, and I am sure that the Secretary of State for the Environment is rather remiss to be surprised that the dispute has reached the stage that it has.
It was as far back as September 1981 that talks on comparability and relativity first started, and they have been proceeding since then. It was no wonder that in the Sunday Times of 9 January this year, Sir Robert Marshall, who recently retired as chairman of the National Water Council, said:
Water workers are dedicated men who feel that they have lost ground, and I think that that is right. Four per cent. is well below the going rate in pay offers.
The Secretary of State should not be surprised at the attitudes currently being taken by the trade union negotiators, especially in view of the fact that in their various meetings with the employers they do not feel that any real negotiations have yet taken place.
I want to underline what was said by my hon. Friend the Member for Newcastle upon Tyne, West (Mr. Brown). The offer was first discussed in the November meeting. In the January meetings the reaction of the employers, when the trade union side started to want negotiations to get going, was immediately to want to refer those negotiations to binding arbitration. My hon. Friend was right to refer to the document of 21 January which set up the mediation—and it was mediation and not arbitration. That document was signed by the employers' side and the union side and said that the parties committed themselves to bargaining in good faith and that they would exercise their right to invoke the final stage of the procedure only in the last resort.
The union side does not yet feel that any bargaining in good faith has taken place because it believes that the employers' side has the Government permanently breathing down its neck. How can the employers bargain in good faith when they have the Secretary of State looking over their shoulders the whole time?
Let us consider the mediator's recommendation—and I say again that it was mediation and not arbitration. It is interesting to note that in both paragraphs 5 and 8 of his report he recognises that the unions have a deeply held grievance. It is not to be dismissed lightly, as one hon. Member tried to do. What is more, the mediator says in paragraph 8 that there should be talks as a matter of great urgency.
The mediator himself recognises that there is a deeply held grievance on the part of the trade unions.
Unfortunately, in a most peculiar reference, he goes on to brush aside the claim for relativity and comparability merely because of economic circumstances. It is a long time since I have seen a mediator's recommendation which dismisses a relativity claim or reference simply by referring to the prevailing economic circumstances.
Let us go on to consider the claims of the Secretary of State, some of which he repeated today. The right hon. Gentleman talks of water workers being able to earn at least £10 a week more under the present offer. What kind of water worker is the right hon. Gentleman referring to? According to figures that I have seen, if a water worker benefited by an increase of about £10 a week he would have to be a class 1 employee, he would have to have 33 per cent. bonus earnings and he would have to be working shifts, weekends and at least two hours' overtime. If the right hon. Gentleman is arguing that all water workers would get that kind of increase, I suggest that he should check his figures, because they are very misleading. Some of the water workers in my constituency whose pay slips I have seen qualify for family income supplement. I hope that the right hon. Gentleman will get some of the figures in correct proportion.
The right hon. Gentleman also claims that the Government are not intervening. They are, of course. They are proposing to wind up the National Water Council. That is intervening. They are saying that the employers cannot offer more than 4 per cent. That is intervening. They prevented the employers' latest offer. That is intervening as well.
The Secretary of State even tried to suggest last week that in some way the employers were non-political. I come from Warwickshire. I can tell the Secretary of State that Sir William Dugdale, the chairman of the employers' side, used to be the leader of the Conservatives on the Warwickshire county council.

Dr. Keith Hampson: Mr. Hill?

Mr. Huckfield: The chairman of the National Water Council is Sir William Dugdale, who was leader of the Tories on the Warwickshire county council. He flies his own aeroplane. When the chairman of the Severn-Trent water authority, Sir William Dugdale, buys land in Warwickshire he is usually buying it from himself as a private person. Is the right hon. Gentleman claiming that the chairman of the National Water Council is in some way non-political?
Let us look, finally, at the report of the Monopolies and Mergers Commission on the Severn-Trent water authority and at some of the extravagant expenses allowances that members and officers of that authority were claiming. Recently, for example, that employer spent £7,000 sending officers and members and their wives to an international water conference in Zurich which was nothing but a Swiss junket. That is the kind of employer that water workers in my constituency have and that is why they feel justified in standing firm for their claim.
The inquiry suggestion came from the unions. It did not come from ACAS. The unions asked for the inquiry because they
wanted the inquiry to recommend a formula for resolving the dispute.
They made that suggestion in good faith. I hope that even now the Secretary of State will use his influence to see that that suggestion is taken up.

Mr. Den Dover: One matter always puzzles me in circumstances such as these. Why do the Government or the employers always have to give way and allow the unions to gain ground in disputes of this kind? We have seen wage increases put on the table. A mediator has been appointed following the agreement of both sides, and he has rejected the upper quartile argument and also a comparison with electricity and gas workers.
We have a formal agreement, signed before the chairman of ACAS, saying that there shall be binding arbitration agreed by both parties and that the findings will be accepted by both parties. However, when I asked my right hon. Friend earlier in the debate why the unions did not want binding arbitration and instead wanted a court of inquiry, I received no real answer.
We now have a suggestion from the unions that there should be a court of inquiry. However, I hope that before the court of inquiry begins we shall see a return to work. I also look for a categoric assurance from the unions that they will accept the findings of the inquiry.
The unions want upper quartile earnings and they also want to be compared with gas and electricity workers. I suggest that they should also be compared with workers engaged in similar activities in the private sector. As a civil engineer, I know the earnings of those employed by private contractors up and down the country. When we are considering comparability, we have to remember that workers in the private sector have to work hard, have to compete and have to live or die by their efforts Water workers in the public sector have their jobs for life and have no enforced redundancy.
I hope that the court of inquiry will take those factors into account, because there is complete disparity between public sector and private sector workers. I do not believe in comparability. I feel that there is the market place. There is the law of supply and demand. It is that which should apply in disputes such as the present one.

6 pm

Mr. Don Dixon: I declare an interest, not only as a sponsored Member of Parliament, but as someone who pays water rates. This Government have achieved something that no other Government have achieved. They have caused the most moderate of workers to decide, by a majority of four to one, to strike.
The strike has been caused by the interference of the Secretary of State for the Environment. He reduced the employers original offer from 6 to 4 per cent. It is no good him talking about settlement by arbitration when he has upset that possibility by his interference. He compared the pay offer with the present rate of inflation. He should compare it with the rate of inflation that prevailed when negotiations began.
I do not want to repeat all that has been said by my night hon. and hon. Friends. The Minister has asked union officials to restrain their members and to ensure that emergency services are maintained. Unless the employers or the Government are prepared to negotiate in a worthwhile manner, the matter will be out of the hands of the responsible union negotiators.
After holding my surgery last Saturday, I visited the Howden water works, which are being occupied by a workers sit-in. I spoke to the workers for two hours. They are moderate men who have never been on strike in their


lives. They have never broken the law. Yet they are so infuriated by the Government's interference in the negotiations that they are prepared to take the law into their own hands.
People are boiling water, using standpipes and some of the elderly are without water. The responsibility for that lies squarely with the Secretary of State for the Environment. He interfered in the strike and prevented negotiations which would probably have settled the dispute some time ago. What faith can the trade unions have in binding arbitration when the Government abolished the Clegg commission on comparability? Only one person can settle the dispute, and that is the Secretary of State for the Environment. He began the dispute by his interference. Let him accept the union's suggestion for an inquiry as soon as possible.

Mr. Anthony Beaumont-Dark: I hope that you, Mr. Speaker, will look after the rights of Back Benchers. More than two-thirds of the debate has been taken up by Front Bench spokesmen. These debates are as much for Back Benchers to make their views known as they are for distinguished members of either Front Bench.
The hon. Member for Nuneaton (Mr. Huckfield) referred to Sir William Dugdale as a prominent Conservative. I was not aware that Mr. Len Hill was anything other than a prominent Socialist. If anything has jaundiced the negotiations, it has been the talk of £5 or £10 a week being available. It appears to have bedevilled so many of the negotiations.
This is a short debate and I shall not repeat the comments of other hon. Members. The most important clause in the national water agreement is clause 12, which was introduced to save the country from the position in which it is now placed. As my hon. Friend the Member for Grantham (Mr. Hogg) said, the elderly are cut off from water supplies. In my constituency there have been 38 burst mains. I am sure that every other hon. Member can tell similar tales.
Public services are meant to be what the name implies. They are meant to serve the public, whether they be electricity, gas or water. They are vital services for the well-being of people in their homes, and also for industry. Nobody is decrying the fact that the water, gas or electricity workers, because they provide a vital service, should be properly attended to when they put forward a wage claim. However, we must bear in mind the wide gap between the two sides. One party offered 4 per cent. while the other demanded 20 per cent. Therefore, was it not sensible for the employers immediately to suggest arbitration? Surely if the case was so good, and if we can trust ACAS and the negotiators—and good cases have been put forward for having such trust—was not it more sensible, responsible and honest to suggest arbitration?
People are going without water because we are arguing about what is arbitration and what is an inquiry. One side will not accept that the outcome of the inquiry or arbitration should be binding. The British people will not forgive either side for not quickly realising that, although they have some rights, those whom they are meant to serve have even more rights.
The dispute has not been handled well by either side. The Secretary of State was honest enough to say, when quoting the mayor of New York, that one never comes up roses from a sewerage workers dispute. No one will come out of this dispute with any credit. The employers have not done well. They have lost public support because they have put the case poorly. The unions have lost support because 3 million people who are without a job look upon those being offered 8 per cent. in addition to a safe and secure job as doing well in the present position. In all these matters—whether water, gas or electricity—we must decide on some form of compulsory arbitration when people cannot reach a sensible agreement. The people and their representatives cannot be blackmailed or find themselves suffering as a result of other people's foolish negotiations.
I hope that we can agree that clause 12 should operate and that the unions and the employers should agree that the people should be freed from the present trouble. If negotiations had been handled properly in the first place, none of us would be in this position.

Mr. Denis Howell: The dispute was born out of the distrust that was created—or the good will that was destroyed—by the continuous intervention of Government in the free bargaining of the water industry. Like all industrial disputes, at the end of the day it must be settled around the table.
I am sorry that the Secretary of State today appeared to close options when he should have created them. Even if there is a committee of inquiry, a mediator, binding arbitration or any other method of third party judgment, the findings must be accepted and implemented. That requires trust and good will. They have been systematically destroyed during the past six or seven months by the Government's actions, as I shall seek to show in some detail.
The main task of the debate is to create trust and to generate good will. But that will not happen until we understand the processes that have destroyed them. The unions believe that the Government's intention is to destroy their national bargaining position, to divide them, to carve them up and to force them into regional negotiations. Such negotiations would be far more dangerous for the industry and for Britain than central negotiations have ever been, but that is another point. The essential point is that by their every action the Government have convinced the unions that their strategy is to destroy national negotiations. There have been eight stages in the development of that strategy. The process goes back some six months. It started last July, well before the water negotiations got under way. It started when the Chancellor of the Exchequer made it perfectly clear to the chairmen of the nationalised industries that he wanted national bargaining replaced by local bargaining. That happened last July, and that set the scene for this developing strategy. It is no good the Secretary of State shaking his head. I am telling him what happened, on quite good authority. If the Secretary of State is not shaking his head in disagreement, he must be keeping himself awake.
This policy first saw the light of day in the Government's consultation paper, which came out last July. That consultation paper could not have been more


damaging or more serious for industrial negotiations. I shall quote paragraphs 21 and 22. The Minister will know these quotations by heart. Paragraph 21 says:
Legislation to effect the abolition of the Council will include repeal of section 26 (2) (3) and (4) of the Water Act 1973. It is not intended to replace these statutory provisions".
Paragraph 22 says:
Bargaining machinery established under … the Act will however cease to exist on the day appointed by the Secretary of State for the Council's functions to cease (expected to be 30 September 1983); and the collective agreements themselves will cease to operate on that day".
In other words, the Government were saying directly to the unions in the consultation paper as long ago as July "We are going to end all national negotiations in this industry". On the day that the Government said that, they turned the unions' doubt into certainty. That was the beginning of the whole story.
That certainty was reinforced when the Water Bill was published in October, by the proposed abolition of the National Water Council, and the total absence of comment on the National Joint Industrial Council machinery.
It was in that setting that we came to the famous day in November. [Interruption.] I know that when the Secretary of State cannot answer a point he holds a conversation with his next-door neighbour. I know him well. I hope that the Minister will reply to what I am about to say, although of course the Secretary of State ostentatiously refuses to give way, for obvious reasons, when we seek to intervene in his speeches. On that day in November, when the water chairmen were about to start with an offer of 6 per cent.—that being the offer that they judged to be reasonable—the Secretary of State himself—he knows this; I have put this to him four times in the House, and he has never denied it—intervened by telephoning his negotiators and virtually telling them that they were not to offer a penny over 4 per cent.

Mr. King: I am sorry if I appeared discourteous to the right hon. Gentleman, but I was on another point at the time. I am glad that he has raised this matter, because it gives me an opportunity to say a word on it. I have it on the best authority that at no time did the employers intend to open their offer at 6 per cent.

Mr. Howell: The Secretary of State clearly refuses to tell the House that he did not telephone anyone, that he did not intervene, because he was relying on his chairmen to do what he knew they knew he expected them to do. That is the truth. I said that they wanted to open at 6 per cent., but that they opened at 4 per cent.
I was described by one newspaper at the time as being "very angry" when I raised the matter in the House in a private notice question in November. Indeed I was, as would anyone be who knows anything about the industrial relations of this union and the inevitable results of a serious breakdown, with the consequences that we are now seeing. That situation is a result of the Minister's monstrous intervention.

Mrs. Elaine Kellett-Bowman: Alleged.

Mr. Howell: I have alleged it, and the Minister cannot deny it. I have now raised the matter five times in the House—three times at this Dispatch Box, and twice upstairs in the Committee considering the Water Bill. The matter has been clearly put to the Secretary of State, and on not one of those five occasions has he denied the truth of what I am saying.
The truth is that the Government have never attempted to convince the industry that those allegations are not true, and the Secretary of State has certainly not convinced this House. Indeed, the opposite is true. There has been continual Government intervention. When Mr. Len Hill made his famous offer of £5 to £10 as a minimum for productivity, it was the Secretary of State who demanded time on "The World at One"—all these negotiations seem to take place on "The World at One" which is a quite remarkable situation—so that the following day he could correct what Mr. Hill said on the same programme the day before. When he was asked by Mr. Brian Widlake what he was doing, was he attempting to correct, or was he interfering with the negotiations, he said "No". Mr. Widlake then asked him, "If you are not interfering, Secretary of State, what are you doing in this studio?" Game, set and match to Mr. Widlake. The Secretary of State was back to his old tricks of giving a tortuous three-minute answer so that we all forgot the original question. However, we listened very carefully to what he said.
The next step in the timetable was three months of Total indifference. Nothing happened between November and January. There has never been such a critical period of absolute indifference in industrial relations. From November until 21 January, when the mediator was appointed, there were no meaningful negotiations. It is no wonder that the unions went to the mediation feeling that the Government were interested in nothing but arbitration and had no interest in purposeful negotiations.
Throughout the long negotiations at ACAS—all 12 hours of them—after the mediator's report, there was no proper negotiation. I notice that the Secretary of State had the procedure agreement in his hand, but he could not point to a single clause that allowed him a locus in these negotiations. This is an independent nationalised industry. It does not depend on funds voted by Parliament. We should ask the chairmen of nationalised industries whether in future they should allow themselves to be shoved around in this way by Ministers who have no responsibility. I know what the Secretary of State will say. He will say that on previous occasions, when Labour was in power, there were discussions with the chairmen. Indeed there were, because then we had an open incomes policy on the table. We all knew what it was and we were all negotiating from it. Now we have a Government who profess to believe in free collective bargaining, and then proceed to have an incomes policy in the public sector alone. That is totally irresponsible.
We all hoped that the famous paragraph 8 in the mediator's report would get us off the hook in this dispute. The Secretary of State said repeatedly today that the unions would not accept the mediator's report.
The truth is that the unions accepted the mediator's report, which said that there would be additional sums for productivity deals. The unions went back to ACAS to negotiate—they thought—with the employers and the famous £5 to £10 was immediately brought up. Those productivity deals, whatever they were worth, had to be judged against what the leader of the employers' side said that they would be worth. The men, as we all know, believed that they would negotiate productivity deals worth between £5 and £10 and instead were presented with a deal worth 50p. The men are intelligent and honest workers and they thought at the end of the day that they had been sold down the river. Their negotiators could not have negotiated any deal worth 50p when they had gone


in the morning thinking that they were about to receive between £5 and £10 in exchange for productivity. It was never possible to produce such productivity deals because that sort of money is not in the industry any longer. All these productivity deals have been made before in years past. This is a capital-intensive industry.
It is a completely new twist for the Government to say now that everything must go to arbitration, when, as we know, the NHS and the Civil Service workers, represented by the same unions, were refused arbitration last year. I shall add a new dimension and tell the House that two years ago, when the negotiations in the water industry reached a critical stage with 10 per cent. on offer, the Secretary of State—then the Minister of State —encouraged the employers not to go to arbitration but to up their offer so that they settled for 12·3 per cent., much to the disagreement of many regional water authorities in Britain. Those chickens are partly coming home to roost in this dispute. It is the Government who are destroying the arbitration procedures and they have no right to be lecturing the unions or anybody else about the sanctity of arbitration. The Government refused to take the dispute to arbitration when they had the opportunity and the responsibility to do so.
The Government's statutory obligation is another important aspect of the dispute that has not been mentioned at all today. Nobody can have any doubt that the Government are behaving unlawfully at present. About three months ago when we discussed the matter in the House I asked the Secretary of State what he was doing to maintain his statutory obligations and, again, he avoided the issue. This is not a new point as some hon. Members may think. Those statutory obligations are twofold. The first is to supply the British people with good wholesome water and the second is to maintain the quality of river water. Both those statutory obligations are contained in the Water Act 1973 and at least three or four EC directives. The industry has not maintained the lawful supplies that the Government have a duty to ensure. I am glad to see that this morning no less an eminent authority than Lord Denning has upheld the "Howell judgment" in this House as to the Government's lawful duty. The Government have contracted out of their obligations and they have had several months to say a word about that but have done no such thing. Quite apart from the contractual obligations, they have failed in their obligations to people who pay for their water in advance and who are not now receiving any.
At the end of the debate the important point is simply that it is in everybody's interests for the dispute to be settled by honourable means as soon as possible. That is one thing on which all hon. Members can agree. I believe that it can be settled and so does ACAS. I know that the unions believe that it can be settled and I was glad to hear this morning the spokesman from the NWC saying the same thing on the radio. The terms of reference can be agreed by ACAS immediately and the inquiry set up at once. Its findings will then be received by the NJIC. It will treat them in the responsible way that we would expect. Indeed, I know that both sides of the industry will treat the inquiry's findings in an honourable and responsible way. As one of the industrial negotiators on the union side said, "We shall not walk away from them." That is a phrase of great significance.
I started my speech by talking about the distress that has developed and about the killing off of national negotiations because it must be understood that when the unions receive the inquirt's findings they will use the national negotiating machinery. The findings will be received and improved and that is important for the unions. It is important not just that they should change the findings but that the national machinery, which they think it is the Government's strategy to destroy, will be used to receive the findings and to honour them. Therefore, I hope that when the Minister replies he will endorse the hope and belief that the inquiry should be established, the findings should be published, and they should be received and implemented by all sides.

The Under-Secretary of State for the Environment (Mr. Giles Shaw): I must confess to astonishment that the right hon. Member for Birmingham, Small Heath (Mr. Howell) should trace the genesis of the dispute to the possibility that the national wage negotiating structure should no longer be in place due to the Water Bill, which is presently passing through the House. That is tantamount to saying that 50,000 houses are without supply and that 7·5 million people are required to boil their water as a precaution and are consequently put at risk because there appears to be the view that somehow or other the future of national negotiations is the major issue.
The right hon. Gentleman knows that when the Bill was in Committee hardly any major attempt was made to deal with that point. Indeed, the clause abolishing the NWC, and with it the relevant sections of the Act, went through unopposed. There was no Division on the clause.

Mr. Denis Howell: rose—

Mr. Shaw: The right hon. Gentleman must recognise that if he believes that to be the background to the dispute we are in for a most extraordinary time. Will the right hon. Gentleman accept that no decision has yet been made on the pattern of wage negotiation to be installed after the abolition of the NWC? He knows that in good faith the chairmen have agreed to examine that point and to decide on their recommendation. Neither the right hon. Gentleman nor the Opposition should believe that the genesis of this massively important matter should be held to be in the structure of the negotiations.
I remind the House, as did my right hon. Friend the Secretary of State, of the scale of the problem that is presently before us, in terms of water supply, sewage treatment and pollution policy. We recognise that this is an extremely grave dispute. The right hon. Member for Crosby (Mrs. Williams) referred to pollution, and it is a fact that there have been one or two pollution incidents which have affected rivers. However, I wish to remind the House that about 99·8 per cent. of properties are still receiving their proper domestic supply, that there has been no serious dislocation of industry as yet, and that there has been no serious health hazard or pollution incident.
In almost every case attempts have been made to restore supplies to vital premises such as hospitals and renal units. I pay tribute to the fact that in nearly every case the trade unions have agreed that such attempts should be made. However, a twofold lesson can be drawn from that. First, the regional water authorities have been doing a fantastic job to maintain services under the most difficult


conditions. Secondly, despite the enormous difficulties, it behoves everybody to try to overcome them by the speediest and most effective route.
There has been rather an orgy of hindsight today, although it is easy for hon. Members on both sides of the House to indulge in that when examining such a problem. However, I should like to take up some of the points made about where we should go from here. My hon. Friend the Member for Reading, North (Mr. Durant) raised the question of Lord Denning's remarks this morning. Far be it from me to be able to comment on the legal aspects, but I undersand that Lord Denning suggested that home owners who had been left waterless should resort to self-help and that if they had the mains repaired privately they could recover the cost from the water authority. With all respect to the former Master of the Rolls, I must warn householders that they cannot dig up highways at will and that under the Water Acts interference with equipment could be an offence. It is by no means clear that they can recover the cost of repair from the water authority, even if repairs are justified. Therefore, it would be right to show a modest amount of caution in that regard.
My hon. Friend the Member for Bedfordshire, South (Mr. Madel) asked about water rate rebates. The water authorities greatly regret the fact that there has been a disruption of supply and are making great efforts, at considerable cost, to ensure that alternative supplies of some type are made available either through standpipes or bowsers. He will also recognise that they are fully entitled, at least under the Act, to maintain their regular charges for that, just as they did during the drought of 1976.
However, I noted my hon. Friend's views and we have already asked the water industry urgently to consider in what circumstances it would be right to give rebates on domestic water charges where consumers have suffered hardship that can clearly be identified. I refer, in particular, to those who have been deprived of a mains water supply and who have to rely on standpipes and tankers that are at considerable distances. Therefore, we are taking that matter up with the National Water Council and I shall report to the House about it in due course.
The hon. Member for Wood Green (Mr. Race) attacked the water industry for the profits that it makes. He quoted £189 million, but even that is a very small return on the industry's capital assets. If it does not make an adequate return, it will be unable to afford to increase wages. The hon. Member for Newcastle upon Tyne, West (Mr. Brown) asked about the negotiation machinery.

Mr. Race: rose—

Mr. Shaw: I understand that the hon. Member for Newcastle upon Tyne, West has particular knowledge of such matters and I respect his point, but I hope that he will

accept the assurance that no agreement has been reached and no proposal has yet been made about what negotiation machinery will follow the abolition of the NWC.
The hon. Member for Truro (Mr. Penhaligon) gave a robust defence of the situation, saying that there must, indeed, be room for arbitration. He gave full support to the proposition that that arbitration should be binding. That is the crucial factor. My hon. Friend the Member for Grantham (Mr. Hogg) mentioned the closed shop and the work that has to be done by private contractors. Indeed, he has raised that point before in the House. He will know that individual water authorities are making their own arrangements to consider the matter carefully. He will also know that some workers have already returned to work. It is for the employer to decide what is appropriate in each circumstance.
There can be no doubt that the debate centres on what can be done to end the dispute. My right hon. Friend the Secretary of State has made it clear that the proposal for an inquiry exists, and was made by Mr. Lowry, the chairman of ACAS, in his recent statement when he said:
It is our view therefore that the dispute can now only be resolved, and further hardship avoided, by a reference either to arbitration or to some other third party, for a final decision.
That is the position that the Government fully accept. Those who believe that there is an intention to intervene in ACAS's recommendations about the inquiry must be ignored. The Government are four-square behind the view that a way can be found to resolve the dispute. However, the House must understand two undoubted facts. First, given the agreed process of mediation, it is surely right to ensure that the parties that agree to the next and, we hope, final step will agree to abide by its findings. It would be absurd to encourage the setting up of machinery for a final decision if the decision as to whether it should be final rests in other hands. That must surely be so.

Mrs. Shirley Williams: rose—

Mr. Shaw: Secondly, there has suddenly been a national water strike in an industry that has never known a national dispute and we must seek a resumption of the honesty and integrity that has existed for so long between the employers and employees. This country has been extremely well served by the water authorities and water unions, which have maintained very high standards of service and supply. We cannot allow that to be put in jeopardy simply because there is an unwillingness to accept that parties that have entered into an agreement must abide by the decision that is reached.

It being three hours after the commencement of the proceedings, MR. SPEAKER interrupted the proceedings pursuant to Standing Order No. 9 (Adjournment on specific and important matter that should have urgent consideration) and the motion for the Adjournment of the House lapsed, without Question put.

Orders of the Day — Miscellaneous Financial Provisions Bill

Order for Second Reading read.

The Minister of State, Treasury (Mr. John Wakeham): I beg to move, That the Bill be now read a Second time.
Apart from the fact that they are all connected with finance, there is no obvious connection between the clauses in the Bill. If there were, it would not be called "miscellaneous". But that is not to imply that the clauses have no value. I commend them to the House as good, sound administrative measures; the sort of thing which a Government have to bring before the House from time to time. For convenience we have grouped seven such measures in the present Bill. I shall explain what the clauses do, and why the changes they bring about are desirable, and I hope that these essentially administrative measures will command support from both sides of the House. I shall, of course, be happy to answer any question on any aspect of the Bill which any hon. Member cares to ask me.
Clause 1 concerns the Development Commission, which was established by Lloyd George shortly before the first world war with the task of identifying and tackling the various problems of rural areas. Following a review of the work of the commission my right hon. Friend, the then Minister for Local Government and Environmental Services, told the House in March last year that he believed that the commission still had a distinctive and necessary role in bringing economic and social assistance to rural areas of England. The Government accepted that the commission should have a greater degree of independence and should, for example, itself choose the areas in which to concentrate assistance.
At present, the commissioners advise Ministers on how money in the development fund voted by Parliament should be spent. This is an archaic and possibly unique arrangement, so the Bill seeks to establish the Development Commission as a grant-aided body, able to spend directly the money provided by Parliament, and accounting for it directly to Parliament, on the same basis as other grant-aided bodies. The Secretary of State and the Treasury will continue to have a duty to supervise financial matters, and a power to give broad direction of policy and practice.
The Bill also gives us an opportunity to resolve a recent legal doubt whether the Council for Small Industries in Rural Areas, which is the principal commercial agent of the commission, has been acting ultra vires in helping profit-making commercial undertakings. Since the doubt arose the matter has been covered by authorising the relevant sums under the Appropriation Acts. This should not be allowed to continue indefinitely and the Bill, when enacted, will regulate the position.
I shall describe the specific provisions in the Bill. Clause 1 establishes the Development Commission as a grant-aided corporate body, defines its purposes, and, together with schedule 1, sets out its powers, duties and financing. The purposes of the commission are substantially unchanged from what they were when it was

set up in 1909, although the terminology used in this legislation is different from that of 1909. In specifying some of the areas of activity of the commission, the Bill reflects the special role that the commission now plays in the social and economic regeneration of rural communities in England.
These provisions, then, are to bring the statutory basis of the Development Commission into line with its present-day role—not to change that role. The commission's objective remains the economic and social development of rural England, and I hope that the House will welcome this clause as enhancing its ability to carry out or assist others to carry out such a development.
Clause 2 similarly introduces no new principle. It represents a piece of necessary tidying up, in providing statutory authority for the Secretary of State for Industry to make grants, out of money voted by Parliament, to English regional development organisations. At present, authority rests on the Supply Estimates and the conforming Appropriation Acts.
Successive Administrations have paid grant-in-aid to the four organisations listed in the clause. The money supports their work of helping to attract new industrial and commercial development to their regions, which include the main assisted areas in England. The local authorities in the regions are the other main source of income for these regional bodies, which therefore represent a partnership between central and local government. Similar promotional bodies—again supported by both central and local government—exist in Scotland and Wales.

Mr. D. N. Campbell-Savours: Do the Government intend to make additional money available to county authorities, since some authorities with particularly high levels of unemployment have a special role to play, through industrial development units? Will the Minister address himself to such authorities?

Mr. Wakeham: The Bill is not the appropriate place to deal with that. If the Government were seeking to increase the sums available they would not do so in this Bill, which is basically a bookkeeping arrangement. The Minister of State, Department of Industry made a statement only a few days ago in a written reply and I have nothing to add to that.

Mr. John Prescott: I have that answer here. In the Bill, why do the Government choose to give the full amount to some areas and not to others? Is that because of disagreement with some of the local authorities or with the new town corporations? Why is there a differential in the policy?

Mr. Wakeham: That is a matter for the Secretary of State for Industry. It does not arise under the Bill.

Mr. Prescott: We appreciate the Minister's difficulties. He thinks that the Bill is a simple financial measure, but he must know that the Treasury determines policy. I understand that we shall interrupt consideration of this Bill at 7 o'clock and return to it later. In the interval, perhaps the Minister will consult the relevant people and then tell us what clause 2 is about. Many of my hon. Friends will want to ask questions about clause 2, and if necessary the Secretary of State should be brought in to assist.

Mr. Wakeham: I shall listen to everything that is said and do my best to answer any questions. It seemed right in my opening remarks to outline what the clauses set out to do and to deal with specific points later.
My hon. Friend the Minister of State, Department of Industry, anounced on 19 January the level of grant to be paid to each of these bodies next year. The English regional bodies work closely with the Invest In Britain Bureau in the Department of Industry, and their overseas campaigns are co-ordinated with the promotional activity on behalf of the United Kingdom as a whole.
Although the main purpose of the clause is to regularise the payments to these existing bodies, we think it right also to provide for the possibility that other similar bodies may be supported in this way, for the benefit of other regions in future.
Clause 3 is different. Its object is to writeoff debts of £13·4 million owed by Zimbabwe to the Consolidated Fund. These debts stem from obligations contracted by the Governments of Southern Rhodesia towards Her Majesty's Government before the unilateral declaration of independence in November 1965. The debts included liability to reimburse the Government for payments made out of the Consolidated Fund under Treasury guarantees when the Government of Southern Rhodesia defaulted on five loans from the International Bank for Reconstruction and Development.
Following independence, Mr. Mugabe stated that his Government intended to honour these obligations. However, discussions were held in May and June 1980 about Zimbabwe's capacity to service debt obligations in the light of prospects for the country's economy, and under the terms of the Zimbabwean debt settlement which was announced in Parliament on 2 July 1980 the Government agreed to writeoff the sum owed in respect of three of the five guarantees. On 7 November 1980 the then Financial Secretary stated that it was our intention to provide for this by legislation in due course. This is necessary because the debt is an asset of the Consolidated Fund.
The Bill sets out the dates and amounts of loan made by the International Bank for Reconstruction and Development. The first loan was to provide funds for an electric power project, and the final instalment was paid on 2 May 1977. The second loan went towards the development of the Rhodesia railways, and the final instalment was paid on 4 May 1978. The third loan was for an agricultural development programme, with the final instalment being paid on 1 December 1969. The second and third loans were technically made to the Federation of Rhodesia and Nyasaland, but when this was dissolved in December 1963 the Governments of Southern Rhodesia and Northern Rhodesia each assumed direct responsibility for half of both loans. The guarantees were in respect of principal, interest, and other charges in various currencies to the dollar values given. The sterling equivalent of all three was £13·4 million.
Clause 4 widens the range of financial liabilities of public bodies which the Treasury may guarantee under its existing statutory powers. At present these powers generally extend only to guaranteeing the repayment of principal and interest on a loan, though there is a considerable disparity among the industries. The bodies covered are listed in schedule 2 to the Bill. The Bill does not add to the number of bodies covered, nor should what is proposed add to the cost to public funds—rather the opposite.
Lenders offering attractive terms to our public bodies have occasionally insisted on additional obligations beyond the undertaking to guarantee the repayment of principal and payment of interest. For example, they may ask for payment of certain fees in respect of a loan. It is clearly in the taxpayer's interest to guarantee these additional obligations if this is a way of ensuring, that the best terms can be obtained, especially as this can be done without the guarantee adding significantly to our liabilities.
Clause 4 permits that. A guarantee will be given only if the Treasury considers that the loan is worth making on the terms demanded. This is exactly what happens now. Thus, we shall continue to ensure that the best possible rates are obtained, with minimal liability for each loan that our public bodies take on.
Clause 5 amends section 3(2) of the Crown Estate Act 1961 so as to extend the maximum statutory period for which the Crown Estate Commissioners may grant leases from 100 to 150 years. The background is that the commissioners are not normally in a position to be able to finance major site developments as they have no borrowing powers. They therefore look to institutional investors to finance commercial projects. However, in the field of commercial property nowadays, institutional investors favour leases of 125 to 150 years duration, because that allows sites to be redeveloped about halfway through the lease—after 60 years or so, which is reckoned to be the life expectancy of a building.
The commissioners judge that their present inability to grant leases for periods as long as 150 years means that they cannot make the most of the earning potential of the Crown estates. The revenue surpluses from the estates are surrendered to the Exchequer in accordance with the Civil List Acts. I hope that the House will agree that we should not tie the commissioners' hands unnecessarily and should therefore extend the period of leases, as the Bill proposes.

Mr. Campbell-Savours: Is there any evidence that the Exchequer will receive greater sums of money for those leases, or will the clause have little effect on the valuation? As the Minister must be able to justify this to the House, can it be said that the commissioners have found it impossible to relieve themselves of leases and that with the Bill they will now be able to let those properties?

Mr. Wakeham: The commissioners consider that they are best able to make the best use of their property if they can enter into leases of 150 years. That will therefore improve the return to the Exchequer in the sense that they will be able to do better deals by getting better institutional support. That is the purpose of the exercise.
Clause 6 gives the Treasury the power to redeem, upon the payment of compensation, certain small periodic payments at present charged direct on the Consolidated Fund or on Votes under old legislation. These payments are expensive to administer, and it has therefore been decided that it would be sensible to discontinue them, subject, of course, to the payment of reasonable compensation. The compensation is to be so calculated that if it were invested in an appropriate Government stock it would provide an income equivalent to the redeemed annuity.
The Treasury is already empowered under the Consolidated Fund (Permanent Charges Redemption) Act 1873 to agree that any perpetual or non-life annuity


charged on the Consolidated Fund or Votes should be redeemed on certain terms and subject to certain conditions. In the years immediately following the 1873 Act, redemption terms were agreed for many annuities. In some cases, however, this proved impossible and the annuities have continued at increasing administrative cost. The new clause will empower the Treasury to redeem unilaterally small annuities which have been payable since before 1873 or, to put it another way for the benefit of Opposition hon. Members, in 1873 the Government of the day took powers to deal with these matters where a voluntary agreement could be made. We are now in 1983 and hoping to take power to deal with those where voluntary agreement has not been possible.
Clause 7 is designed to amend the provisions of the Local Government Act 1972 so as to provide a greater degree of flexibility to local authority members when making use of the option that is available to them under section 24 of the Local Government, Planning and Land Act 1980 to receive financial loss allowance when they perform the approved duties of the council, instead of the attendance allowance which is generally offered.
At present, the legislation provides that councillors can make this choice or revert to receiving attendance allowance after making an earlier choice to receive financial loss allowance, only three months prior to the beginning of a financial year—or, in the cases of newly elected councillors, at their election or re-election. This creates difficulties for those councillors who have chosen financial loss allowance and who lose their jobs during the year. Under the present arrangements, such members would presumably not be able to show financial loss, yet would be unable to receive attendance allowance instead until the next financial year. That could mean a prolonged period—possibly up to 15 months—without any allowances other than those for travelling and subsistence expenses.
The attention of the Government has been drawn by the local authority associations to the fact that the way in which the present legislation is drawn up is causing considerable hardship in cases where members, having chosen to receive financial loss allowance, quite unexpectedly lose their jobs. The number of these cases of hardship has risen with the increase in unemployment.
Clause 7 provides that a member who loses his job will in future be able to withdraw his financial loss allowance and, from the following day, be entitled to receive attendance allowance for the perfomance of approved duties. The amendment to the law will bring the position in England and Wales into line with that which already exists in Scotland. I think hon. Members will agree that this is a very desirable adjustment to the existing arrangements. The proposal has been pressed by the local authority associations, which welcome the change.
In conclusion, the Bill contains seven measures, some to tidy up or modernise existing arrangements, and the last

one to remedy a hardship caused by the operation of the present rules. All can be justified on their merits, and I commend the Bill to the House.

Mr. Robin F. Cook: I hope that I shall not offend the dignity of that great Department, the Treasury, if I describe the Bill as something of a job lot. It is no disrespect to the Minister's office if I observe that it has been unable to provide the Minister with a thematic speech but has come up with a Bill in which there are seven clauses not one of which bears any relation to the others.
As the Minister said, at least one of the clauses has been waiting since 1980 for legislation, and, having studied the notes on clause 6, I am inclined to feel that it has been waiting since the eighteenth century for legislation.
I shall begin by putting the Lord Commissioner out of his suspense by saying that the Opposition welcome some of the clauses. We see no objection to the rest, and, therefore, it will not be our intention to divide the House tonight. Nevertheless, a number of questions are naturally prompted by the clauses in the Bill and there are some lessons that they can tell us about the economic handling of the country's affairs by the Government over the past three years. I propose to explore some of those questions and some of those lessons. I know that some of my hon. Friends will wish to intervene at a later stage in the debate to rub home the lessons as they affect the regions my hon. Friends represent.
I do not propose to return to those clauses, Mr. Deputy Speaker, if I catch your eye later in the evening and I hope to be excused if I begin, therefore, by following the Minister on his brief tour of the byways of the Bill. I should like to start with clause 3, which relates to the extinction of Zimbabwean debts.
It is obviously unfair that we should contemplate smartly passing back to the Government of Zimbabwe debts that we incurred only because the earlier Government of Rhodesia defaulted on them. It is apt that we should be examining this question tonight, the day after the Chancellor has returned from the IMF meeting where he has claimed a certain triumph in averting major defaults of countries in debt to the IMF by increasing the liquidity of the IMF. The Opposition remain unconvinced by that triumph since the entire increase in the liquidity of the IMF over the next five years is equivalent to the borrowing of Mexico in a single year.
At a time when the number of developing countries is increasing, when those countries are struggling to avoid being pushed into default by bank debts and when the Government have proved singularly accommodating to Argentina in assisting it to avoid defaulting on its bank debts, it is salutary to recall that one of the rare cases of default in international finance occurred in the history of the rebel regime of Rhodesia. I was in this place for half the period during which that rebel regime—

It being Seven o'clock, and there being private business set down by the Chairman of Ways and Means under Standing Order No. 7 (Time for taking private business), further proceedings stood postponed.

Orders of the Day — Ginns and Gutteridge, Leicester (Crematorium) Bill

Order for Second Reading read.

7 pm

Mr. John Farr: I beg to move, That the Bill be now read a Second time.
First, I should explain my interest in the Bill. I was approached by representatives of the company known as Ginns and Gutteridge. They asked me in April of 1982 to help them with the possibility of erecting a new crematorium in Leicester. The Cremation Act 1902 is a narrow and rather out-of-date measure, and it was because of the narrowness of its confines that it was necessary for my constituents' firm to proceed by the Private Bill method. That is why I am promoting the Bill.
The site in Vaughan way, Leicester, does not lie in my constituency. However, I have consulted the hon. and learned Member for Leicester, West (Mr. Janner), in whose constituency it lies. The hon. and learned Gentleman has asked me to say that he is sorry that he cannot be present—I understand that he has to be in Leicester—and that he would have been in his place if that had been possible.
The reason for the introduction of this Private Bill is the narrowness of the 1902 Act. The Bill is a short, five-clause measure. It deals with the relevant restraints of section 5 of the 1902 Act. That Act is now 81 years old and is strictly confined by today's standards. Messrs Ginns and Gutteridge have promoted a Bill to authorise the construction by them of a crematorium in the basement of their premises at 51–55 Vaughan way. The constraints of the 1902 Act provide that no crematorium can be constructed nearer to any dwelling house than 200 yds except with the consent in writing of the owner, lessee or occupier nor within 50 yds of any public highway.
On 5 December 1982, Ginns and Gutteridge, in accordance with Standing Orders, gave us notice of the proposals contained in the Bill together with a statement that every owner, lessee or occupier of the dwelling houses within 300 yds of the land to be used for a crematorium had been circulated about the proposal.
Leicester has been greatly depopulated in some areas and in the 300 yds radius from 51–55 Vaughan way there are now only 21 dwellings in which 38 residents are known to live. They were notified of the proposals even though the 1902 Act requires that only those living within 200 yds be so circulated.
The main purpose of the Bill is to provide better facilities for those in the growing city of Leicester, which is composed of many people of different ethnic backgrounds. One of the features that Ginns and Gutteridge is making of its application in the Bill is that it will afford a service to the community at all hours on all days of the year other than Christmas day, Good Friday and Easter Sunday. It has been providing a funeral directors service from the present site since 1840.
It is felt by many people in Leicester that the proposed development of a crematorium on this site is a natural development of the company's policy. There have been considerable representations from the substantial Asian community in and about Leicester, which feels that its needs are not being adequately catered for at present. Its needs include the arrangement of cremations within 24

hours of death in the evenings or at other times when members of the entire family can expect to be able to attend.
The company applied to the city council in August 1982 for planning permission for the new crematorium. That was granted on 5 October 1982 subject to tough conditions which the company is confident it can meet. These conditions, quite rightly and properly imposed, relate to the emission of fumes or any visible trace of smoke in the air, and Ginns and Gutteridge is confident that it can fully meet the proper regulations laid down by the city council with the modern equipment that it is installing.
Although the city council gave planning consent in October 1982, it has seen fit, for reasons best known to itself, to deposit a petition against the Bill. In many respects it is extremely inaccurate. I can probably best deal with it by referring to paragraph 17 on page 8 of the petition. I can assure the House that, contrary to what is stated in the petition, consultations have not taken place with the Oadby and Wigston borough council in my constituency. No consultations have taken place with that council and no committee has been formed with which it is involved. I telephoned members of the council during the weekend and they told me that they would positively welcome another crematorium in Leicester that would help provide a better service.
A second petition has been deposited by the Federation of British Cremation Authorities, of which the city council is a member. The petition contains wide-ranging allegations about the effects of emissions of unpleasant fumes, obnoxious gases and visible effects if a new crematorium is established in Vaughan way.
The company is prepared to prove to the satisfaction of the Committee that the allegations that are lodged in the petitions of the Federation of British Cremation Authorities and the Leicester City council are untrue. I share that view.

Sir Kenneth Lewis: Does my hon. Friend agree that an answer to petitions of that kind can be met adequately in Committee? Does he agree, therefore, that the Bill ought to be allowed to go into Committee where the petitions can be properly considered and argued, whereupon the House will be able to make up its mind?

Mr. Farr: I am grateful to my hon. Friend for that point. He is absolutely right.
The crux of the city council's opposition to the Bill lies in the opening hours of the present Gilroes crematorium, which is operated by the municipal authorities of the city, and the facilities that Ginns and Gutteridge will provide if it is lucky enough for the Bill to have the consent of the House. At the moment, the opening hours of the city crematorium are limited to 9 am to 3.30 pm, Monday to Friday. That means that there are no weekend or evening cremations. As was said in the statement on behalf of the sponsors, the company has taken a pride in affording a service to the community since 1840 at all hours of the day and all days of the year except Christmas day, Good Friday and Easter Sunday.

Mr. Stephen Dorrell: My hon. Friend is absolutely right about Ginns and Gutteridge excluding Christmas day, Good Friday and Easter Sunday. Will he confirm that Mr. Ginns has said in correspondence that his services are available on Christmas day and that


he has worked through the Christmas holiday? Does he further agree that Ginns and Gutteridge provides a service that no local authority can ask its employees to provide and, indeed, which no local authority employees would be prepared to give?

Mr. Farr: My hon. Friend has hit the nail on the head. Mr. Ginns has also said that there are members of his family who are ready, eager and willing to work any hours of the day and night when normal salaried staff would not be expected to work.
It is important to Leicester to have this additional crematorium facility because it is a rapidly changing city with a host of different enthnic groups. Each has its own wishes with regard to the disposal of the dead. Messrs. Ginns and Gutteridge are principally concerned with catering for that new demand. Some beliefs require cremation to take place within 24 hours of death. If that is the belief of a quite numerous group in the city of Leicester, Ginns and Gutteridge will try to meet it. There is also a strong demand from the large Asian community for cremations in the evening and at night. Moreover, there is a demand for the hand on the casket service. The modern machinery that Ginns and Gutteridge hopes to install will enable a relative almost literally to put the casket in the cremater at the critical time. That operation will be safe because of the modern equipment and the high and special safety arrangements that are associated with it. That cannot be provided or done safely at Gilroes.

Mr. J. D. Concannon: I am listening intently to discover why these strange circumstances should occur in Leicester. Will the hon. Gentleman explain what makes the people in Leicester so different that we have not experienced an upsurge for this type of crematorium in the rest of the country?

Mr. Jim Marshall: He does not know.

Mr. Farr: I do not believe that the hon. Member for Leicester, South (Mr. Marshall) would disagree that the ethnic minorities in the city of Leicester are more deeply absorbed into what I call the British way of life. They are more firmly established in Leicester than in other parts of the country. Unlike communities in other parts of the country, they have not hitherto paid much attention to their customs. Thay are now so well established that they are trying to get things done in the way in which they used to be done before they came to Britain.
I can give the right hon. Member for Mansfield (Mr. Concannon) an example. Not long ago, a group called the Leicester Crematoria Society employed an architect through whom they approached the city council. The society was composed almost entirely of Asian business men. They wanted to acquire 15 acres of land just outside the city to build a crematorium that would meet their special wishes. As is recorded in the minutes of the city council, they made that request in December 1982. The council felt it right to turn down the application. Irrespective of whether my reasoning about the upsurge in the desire to dispose of the dead in this way is right, the fact remains that the interest exists. It is powerful in the city of Leicester. I believe that it is the least we can do to promote and respect such customs with respect to the disposal of the dead and departed.

Mr. Ron Lewis: I know little about the case apart from what was contained in the information that was sent to us by the parties involved. If the Bill is passed, will there be a special place where ashes can be scattered? As the hon. Gentleman will know, many crematoria have woodlands and the like where relatives can go.

Mr. Farr: I have learnt to treat the hon. Gentleman's interventions with respect. They always have great merit. The company hopes to make it clear during the Committee stage that a special garden of remembrance and rest will be provided for the ashes.

Mr. Ron Lewis: Near the crematorium?

Mr. Farr: At the crematorium.
The Bill revolves around the riddle of planning consent that the city council gave in October. It is hard to understand why, having given planning consent, only a month or two later the city council, although it did not withdraw planning consent, made it almost impossible by hinting at tough penalties and lodged a petition against the Bill.
When consent was given in October by the planning committee, a number of proper provisions were made. The details will come before the Committee. I hope that it will be satisfied with them. The detailed requirements laid down by the planning committee required the expenditure of a considerable amount of money and the provision of the latest techniques and equipment, which Messrs Ginns and Gutteridge can provide at considerable cost. They are prepared to do so. Therefore, they were surprised to receive a further letter from the city council saying that it would lodge a petition against the Bill and that, after all, it did not think that it would be a good idea for Leicester to have an additional crematorium.
After the original planning consent was given in October last year there must have been second thoughts about whether it would be helpful for Leicester to have an additional crematorium, although there is a demand for weekend and night work, which the municipal crematorium cannot meet. One can only assume that political pressures were put on the city council and that by a split vote it decided to lodge a petition against the Bill.
The Bill is being debated on Second Reading because of the petition against it by the city council and the Federation of British Cremation Authorities. Other points have been raised in the petitions. I shall not go into great detail because they are Committee points. Some evidence, for example, about the height of the new crematorium's chimney and the question of whether there will be traffic delays if the crematorium is used at certain hours of the day at Vaughan way and near Great Central street, should be discussed in Committee.
I emphasise that the main critique of the proposals of Ginns and Gutteridge is that, however modern the equipment and expensive the machinery that is put into the new crematorium, there must be some visible emissions when a cremation takes place. I am confident, as I am sure the Committee will be, that the equipment which Ginns and Gutteridge will provide will ensure that the whole operation is carried out in what I would call an invisible manner. Also, the whole of that part of Leicester is virtually unpopulated after nightfall and only 31 persons live within 300 yards' radius of the crematorium site. When the new crematorium is erected, it will be impossible to tell when a cremation takes place.

Mr. Deputy Speaker (Mr. Paul Dean): In accordance with the usual practice, Mr. Speaker has not selected the amendment in the name of the hon. Member for Leicester, South (Mr. Marshall).

Mr. Jim Marshall: I shall pick up only two of the points that were made by the hon. Member for Harborough (Mr. Farr). First, he said that many of the matters should be raised in Committee. The hon. Gentleman's speech, dealing with fine detail, was a Committee speech. We are discussing the principle underlying the Bill and what the consequences could be if the Bill were passed. I make it clear at the outset that I bear no malice towards Ginns and Gutteridge. My only disagreement with them is that I do not think that this legislation should have to be passed in this manner, via the Private Bill route.
Secondly, the hon. Gentleman seriously misled the House in two instances, the second of which was when he replied to my hon. Friend the Member for Carlisle (Mr. Lewis). I am not here to defend Leicester city council or the Federation of British Cremation Authorities, but if the hon. Gentleman reads Leicester city council's petition he will see that it states that the Ginns and Gutteridge site is not adequate for the disposal of human remains. If cremation facilities were granted, the garden of remembrance at Gilroes cemetery would still have to be used. Perhaps on reconsideration the hon. Gentleman will withdraw his answer to my hon. Friend.

Mr. Farr: I did not mention this to the House because I did not want to speak for too long. Messrs Ginns and Gutteridge say:
The chapel, rest rooms, waiting rooms, as well as available catering facilities, already provided by the promoters are markedly superior to the equivalent facilities of the City Council at Gilroes. The Promoters fully accept that a Garden of Remembrance is a necessary adjuct to their proposals, but no difficulty in arranging this will arise.
That is stated in the explanation to the Bill.

Mr. Marshall: I still think that the hon. Gentleman should withdraw the answer that he gave to my hon. Friend.
My objection goes deeper than the Committee points that the hon. Gentleman raised. There is an urgent need for the Government to review cremation legislation. It is over 30 years since there was legislation amending the Cremation Act 1902. We must consider seriously whether public attitudes to cremation have altered over the past 30 years and whether section 5 of the 1902 Act is necessary. It is because the company is seeking to waive section 5 of the 1902 Act, which refers to the need for the crematorium to be 200 yards away from dwelling houses and 50 yards from a public highway, that it has to promote the Bill. I believe that only the Government can carry out that review and provide the information that is necessary for the House to determine whether alterations to the present legislation are required.
There are precedents for private legislation seeking to waive section 5 of the 1902 Act or a similar enactment in the Cemeteries Clauses Act 1847. The three examples that I have are the Torquay Cemetery Act 1940, the Merchants House of Glasgow (Crematorium) Order Confirmation Act 1950 and the London Necropolis Act 1956. The important point of principle to note is that none of the organisations in those three Acts seeking a waiver of section 5 was a firm

of funeral directors and all the sites were within an existing cemetery. All three Bills were successful, but only Torquay went ahead and since then the crematorium has been taken over by the local authority.
If the Bill becomes law it will create a unique situation in two ways. First, the crematorium will be directly owned and run by a firm of funeral directors. Secondly, it will be the first time that the waiver will have been exercised outside a cemetery.
It is my understanding that at present no crematorium is owned directly by any firm or firms of funeral directors. The Great Southern group of companies, as a holding company, owns crematoria and also carries on business as a funeral director, but the two are not directly connected. There is no financial link between the two functions. If the Bill becomes an Act there is a possibility of the company promoting cremation for business interests at a time when people are most vulnerable and need sympathy and protection and should not be made to feel that private gain is the objective of the funeral undertaker.
Let us suppose, for the sake of argument, that the Bill becomes an Act. Why should not every other funeral director, not only in the city of Leicester but in the United Kingdom as a whole, apply to operate a cremation service? The arguments that the hon. Member for Harborough has used for Ginns and Gutteridge could apply to the Co-op and the other funeral directors in Leicester and throughout the country. We would have the ridiculous situation where every funeral director was also operating a cremation service.

Mr. Michael Latham: Could the hon. Gentleman explain at least something during the course of his speech? If these arguments in principle are so important, why did the Leicester city council grant planning permission in the first place?

Mr. Marshall: I think that I made it clear at the outset that I am not here to defend Leicester city council or the federation. Leicester city council can do what it wants and so can the federation. My point is that—I am sure that it is not lost on the Minister, even if it is lost on Conservative Members from Leicestershire who seem to be promoting a sectional interest—the principle underlying the Bill has far greater consequences than just giving Ginns and Gutteridge the power to operate a crematorium.

Mr. Christopher Murphy: Will the hon. Gentleman give way?

Mr. Marshall: No, I will not give way. I do not believe that the hon. Gentleman knows all that much about the city of Leicester or the county of Leicestershire.

Mr. Murphy: The hon. Gentleman is talking about a general principle.

Mr. Marshall: Very well.

Mr. Murphy: As a Member of Parliament not directly, involved with the situation in Leicestershire, I am listening with interest to the point of principle that the hon Gentleman is trying to put across. Am I right in thinking from what he is saying that he is against the whole concept of private enterprise being involved in funeral direction and all other aspects of this difficult subject? If so, would he like to explain why?

Mr. Marshall: I am pleased that the hon. Gentleman is dressed suitably for the debate.
What the hon. Gentleman says shows his lack of knowledge and understanding of the subject. If he was prepared to do a little reading to improve his knowledge he would note that some crematoria are already operated by private business men. I am not objecting to private interests operating crematoria. The point of principle that I am making is, first that if the Bill is passed it will create a unique situation in that a funeral director will also be directly responsible for operating a crematorium. I realise that Conservative Members want to keep the debate going until 8 o'clock. The hon. Member for Harborough has his hon. Friends coming back to support him if there is a Division. I also repeat my second point. If a waiver of section 5 is given, it will be the first occasion—again creating a precedent—that a crematorium has been sited outside a cemetery.

Mr. Dorrell: The hon. Gentleman has established that this may be the first time that there would be a direct financial link between a crematorium and a funeral director. He has not established why he believes that to be so unacceptable. He has asserted that it is unacceptable, but so far he has not begun to substantiate that assertion.

Mr. Marshall: What I have said so far is that it would be a unique situation in two ways and I said at the outset that there is a need for the Government to review the operation of the legislation. The situation should not be created by means of private Bills.

Mr. Dorrell: Is the hon. Gentleman really saying that the House of Commons cannot make up its mind on the issue until the Government have spoken?

Mr. Marshall: I am in favour of the House of Commons making up its mind. It will make up its mind in the next half hour.
I repeat that if Ginns and Gutteridge can so operate a crematorium, why should not every other funeral director be in a similar position? They will not be unless they follow this route. I suggest that if permission is given in this instance, the Government must have a view of how they will react if every other funeral director wishes to do the same. Subjectively, do we want a situation where every undertaker can operate his own crematorium? I do not know. It is a matter for the House and the Government. But until there is an investigation and a review by the Government we shall not be in a position to decide.
Secondly, will it lead to a deterioration in standards if every funeral director operated his own crematorium? That again reinforces my view that we need a Government review and new legislation.
Being parochial and coming back to the city of Leicester, I believe that it is necessary to consider the effect on the present crematorium at Gilroes cemetery in Leicester. There is capacity for 27 cremations a day and at present there are only 14. If the city council's projections are to be believed—I accept them in this instance—further facilities will not be required until the end of the century. It is to cope with the situation at the turn of the century that the city council intends to develop the site at Enderby.
If the Bill were passed it would take business away from Gilroes but the city council would still have to maintain the large gardens at the cemetery and the buildings. There

would be two alternatives. First, there could be an increased rate burden on the ratepayers of Leicester. Conservatives always seem keen to protect the interests of ratepayers and I would have thought that they would oppose the legislation on those grounds alone. Alternatively, it could lead to an increased charge for the bereaved. Either alternative is undesirable. For that reason, and for the reasons of principle that I have enunciated, I intend to seek to divide the House.

Mr. Stephen Dorrell: It is with some trepidation that I rise to speak on this subject. My constituency is served direct by its own crematorium, but I believe that some people who live in Leicester have their loved ones cremated at Loughborough rather than at the Leicester city crematorium at Gilroes. In that sense, therefore, I have a direct constituency interest, but that is not what I want to speak about.
The hon. Member for Leicester, South (Mr. Marshall) argued that the problem is that the Bill will allow a funeral director to have a direct financial interest in a crematorium. I do not see that that is an objection. First, the hon. Gentleman argued that it would be different if the crematorium were incorporated as a separate company. I suspect that if that were all that prevented the hon. Gentleman supporting the Bill, Ginns and Gutteridge would be happy to set up a separate company—presumably owned by the same shareholders, as in the instance that the hon. Gentleman cited—to be responsible for the crematorium. There would then be two separate companies—the funeral directors and the crematorium company. I cannot see that that would improve matters from the hon. Gentleman's point of view, although there would doubtless be no objection to organising the business in that way.

Mr. Jim Marshall: As the hon. Gentleman will appreciate, cremation has never been positively promoted in this country as a means of disposal of human remains as opposed to the traditional method of burial. If a firm of funeral directors has a direct financial business interest in cremation there is, to my mind, a strong possibility that it will be in its financial interest to promote cremation as opposed to other forms of disposal.

Mr. Dorrell: The hon. Gentleman may or may not be right, but if that argument has weight it has exactly the same weight in the instance that he noted of the two companies held by the same holding company as it would have if Ginns and Gutteridge set up its own crematorium company. In any case, it is an unjustified slur on the character of most funeral directors to imagine that they will promote a service that they offer as opposed to burial. I am sure that most funeral directors, including Ginns and Gutteridge, would leave the choice open to the family, or that if the individual had expressed his own wishes in his lifetime those wishes would be respected. The argument is not based on any evidence and cannot be sustained, although what the hon. Gentleman fears could perhaps be a remote possibility.
The hon. Gentleman then argued that if we allowed this precedent of the funeral director having his own crematorium, the flood gates would be opened. Where might the flood lead us? The hon. Gentleman suggested that every funeral director might have his own


crematorium. I see no real objection in principle to that, but there is a simple business reason why it will never develop, and it is clearly illustrated in the case of the city of Leicester. A crematorium can handle many more cases than are generated by the average funeral director. The level of business required to make the crematorium necessary is very different from the level of business required to support the funeral director. That is one obvious reason why we shall never reach the position in which all funeral directors have their own crematoria, so the hon. Gentleman's basic argument does not really hold water.
Given the history of this case, that fact should not surprise us. All the opposition to the Bill, both from the city council and, with great respect, from the hon. Gentleman, has been essentially insubstantial. The hon. Gentleman attacked my hon. Friend the Member for Harborough (Mr. Farr) on the ground that all my hon. Friend's arguments were essentially Committee points. That is unfair, as my hon. Friend was simply responding to the arguments from Leicester city council and other opponents of the Bill.

Mr. Ron Lewis: It should not be overlooked that the Association of District Councils, a very important body, also opposes the Bill.

Mr. Jim Marshall: It is Tory-controlled, too.

Mr. Dorrell: No doubt if a referendum were held we should find a large number of people against the Bill, but we can deal only with the arguments that have been put to us. So far as I know, the Association of District Councils has not put its views in writing to Members of Parliament.

Mr. Jim Marshall: Yes, it has.

Mr. Dorrell: The hon. Member for Leicester, South is in an especially privileged position. Clearly I am not on the association's mailing list, as it has not circulated me. Nor, I gather, has it circulated my hon. Friend the Member for Harborough. Therefore, it is entirely reasonable that my hon. Friend did not respond to points that he did not know had been made to other hon. Members. My hon. Friend responded to criticisms of the Bill advanced by Leicester city council and to some extent in the local press. It is unfair to criticise his speech on the ground that it dealt with narrow Committee points. As he was merely responding to the arguments against the Bill, one may argue that the arguments against the Bill are based on narrow Committee points. The hon. Member for Leicester, South has thus condemned his own case by criticising my hon. Friend's speech. Essentially, the case against the Bill is a Committee case. It is insubstantial. No major argument of principle can be adduced against the Bill.

Mr. Concannon: I am not from Leicester, so I take a broader view. In my view, the issue before us is whether section 5 of the Cremation Act should be waived on this one occasion. Why should that be done just for Leicester? Surely if section 5 is wrong for Leicester it must be wrong for everyone. I am not being parochial. I am not arguing for or against Leicester. I want to know why on this one occasion we should waive that section for that one city. The issue is not whether Leicester needs a crematorium, private or public, but whether the proposed waiver is justified on this one occasion in this one instance.

Mr. Dorrell: The answer to the right hon. Gentleman's question, in a sense, is "Why not?" We are not being asked to decide the general question whether section 5 is right or wrong. We have to decide whether there is any objection in public policy to the provision of the Bill before us today. I see no objection to it and I have not yet heard any objection.

Mr. Concannon: That was my objection.

Mr. Dorrell: The right hon. Gentleman says that his objection is that the Bill contravenes the provisions of an Act of Parliament dating from 1902. If this were the first occasion on which that section had been contravened, he might have a point. Even then, although I am no expert on House of Commons procedure, I understand that any private Bill of this type will by its very nature contravene specific provisions of previous legislation.
The right hon. Gentleman may or may not be right. It is not, however, the only occasion on which the section has been contravened. This was acknowledged by the hon. Member for Leicester, South, who drew a distinction between this and previous cases. I have suggested that it is a distinction without a difference. There is no basis for the distinction that he drew and no reason, therefore, for us to draw a distinction between this Bill and previous Bills that have been passed in contravention of the section in the Cremation Act.

Mr. Farr: The right hon. Member for Mansfield (Mr. Concannon) asked why section 5 of the Cremation Act 1902 should not apply to Leicester. There is a whole list of precedents where section 5 of the Act has been disapplied by private Bills. These have included the London County Council (General Powers) Act 1935, the Greater London Council (General Powers) Act 1971, the Mortlake Crematorium Act 1936, the South-West Middlesex Crematorium Act 1947, the North East Surrey Crematorium Board Act 1956 and the City of London (Various Powers) Act 1969. Those are some of the Acts that have disallowed the provisions of the 1902 Act. They are precedents which we are asking Leicester to be permitted to follow.

Mr. Dorrell: It is worth emphasising that the Greater London legislation exempts the whole of Greater London from the provisions of the 1902 Act. The exceptions have already been drawn in large number. If it is argued that there is a difference between them and this Bill, I do not believe that the difference amounts to grounds for rejecting the Bill.

Mr. Jim Marshall: Does the hon. know whether any of the precedents given by the hon. Member for Harborough (Mr. Farr) apply to private funeral directors or to local authorities? I am sure that the two hon. Gentlemen will know that, in general, a private Bill is not required for funeral directors wishing to establish a crematorium, unless they want the waiver of section 5, whereas with local authorities it is necessary.

Mr. Dorrell: I cannot quote the name of the firm in order to establish the point beyond peradventure. I am, however, virtually certain that the answer is "Yes". I am virtually certain that there is, somewhere in London, a private crematorium that benefits from Greater London council miscellaneous powers legislation. It is almost certain that there is, somewhere, another private


crematorium that benefits from a derogation from the original Cremation Act, although I cannot refer to a particular instance in detail.
I wish to come back to the central argument of the promoters of the Bill. The argument is that the opposition to the Bill is insubstantial, for reasons that have mostly lain beneath the surface. They did, however, break the surface in the speech of the hon. Member for Leicester, South. The hon. Gentleman recognised that one of the arguments against the Bill was the impact of a new crematorium on the municipally owned city crematorium at Gilroes. That has, I believe, prompted Leicester city council to change its original grant of planning permission for the crematorium and then to petition the House to reject the Bill. There can be no clearer illustration of the truth of the statement that the real reason for objection to the Bill is the protection of the municipal monopoly in Leicester than the minutes of the Leicester city council recreation committee of 10 December 1982.
At that stage the city council's planning committee had already given planning permission for the crematorium to go ahead. It had agreed that the crematorium should be built. At its meeting on 10 December the recreation committee, which is responsible for running Gilroes, the municipally owned crematorium, got wind of the fact that the city council was allowing a private funeral director to establish a private sector competitor for its business. It started looking around for an excuse under which the planning permission could be revoked. The minutes of the recreation committee state that a letter had been received from Ginns and Gutteridge, which
Stated that the proposed crematorium was not intended to compete with Gilroes but to make better facilities available, especially for the ethnic minorities.
What concerned members of the recreation committee was the fact that the proposed crematorium intended to compete with Gilroes.
The minutes added:
The City Planning Officer stated that the proposal had received planning approval, subject to some stringent conditions relating to exhaust gases. It was not the planning committee's prerogative to consider the financial effect on the council's own crematorium activities.
There cannot be any clearer evidence in the minutes of the real concern of the members of the recreation committee. However, there is better to come. The minutes continued:
The City Attorney stated that in view of the planning approval it would be difficult to object to the proposal, if this were the committee's wish, on environmental grounds but the officers might be able to prepare a case on other grounds.
The officers, the city attorney is apparantly saying, were willing to go away and grub up a case on grounds as yet undefined if the city council wished to oppose the development on the real ground that what was being done was to establish something in competition with a municipally owned crematorium.
If one looks through the Leicester city council petition to the House in opposition to the Bill, one can have no clearer evidence of the insubstantial nature of the case put by the opponents. Paragraph 11 states that it was necessary to erect a chimney 70 metres high on the advice of the chief environmental health officer. The next sentence states:
A chimney of that height would not however be acceptable on planning grounds

The Americans gave us Catch 22. Leicester city council seems to be developing its own home ground version—"On the one hand you have to have it. On the other hand we ban it." What is the promoter of the Bill supposed to do?
The next paragraph contains a passage which I hesitate to read as it might be regarded as being in bad taste. It reads like a direct quotation from a Joe Orton comedy. In talking of people arriving at the premises of Ginns and Gutteridge, it says that
these people see the funeral processions which pass at present (and funeral processions are not generally considered a pleasant sight) but if the crematorium were established they would know that in some cases at least the corpse was to be cremated. That is something which in your Petitioner's submission is found so distasteful by some as to cause positive distress.
We all have sympathy for people whose relatives have died recently, but it is stretching credibility to imagine that passers-by would be more distressed on seeing a funeral cortege knowing that it was going to a crematorium than they would be if they knew that it was going to a traditional burial. That is absurdity gone mad.
The petition continues in that vein. In my view, it is a very insubstantial case against a Bill promoted by a firm which offers a good service in Leicester and which wants to improve that service to all members of the community.
I hope that the House will resist the blandishments of the hon. Member for Leicester, South and give the Bill a Second Reading.

8 pm

Sir Kenneth Lewis: If ever there was a case for the Committee stage of a Bill coming before its Second Reading, this is it.
The Bill deals with a local matter in an area on which my constituency impinges slightly. All the arguments from both sides to which we have listened ought to be deployed in Committee and, I am sure, will be so deployed. I do not know what will happen as a result. Obviously there are points to be made on both sides, but at least in the Committee counsel will be instructed to represent the views of both sides.
The House of Commons has to consider where it goes with the private Bill procedure. Very few hon. Members are present to listen to the debate. Most of us are locally interested. It does not deal with a matter of great national interest, and it breaks into business which is of national importance. Probably there will be a Division at the end of the debate, and again very few hon. Members will take part in it. What may be an important Bill in terms of one specific locality—in this case, the Leicester locality—may well founder because it concerns a local matter that is of no interest to large numbers of hon. Members who represent constituencies far away from Leicester.
This debate is a good example of a procedure that needs modernising.

The Under-Secretary of State for the Environment (Mr. Giles Shaw): It is one of the fascinations of the House of Commons that, following a debate for three hours on a national emergency, we move to consider a private Bill on the creation of a private crematorium in Leicester. That is in no way to denigrate the promoters of the Bill from the point of view of the business of the House, and I note what my hon. Friend the Member for


Rutland and Stamford (Sir K. Lewis) said about the procedure, but the fact remains that Parliament allows a private Bill to have a proper debate and, quite rightly, it enables hon. Members to advance the opposing point of view. They have a right to do that and to take the side of petitioners against the Bill.
It is my duty to give the Government's view on the Bill, bearing in mind all the time that it is essentially a private Bill, the Second Reading of which was well moved by my hon. Friend the Member for Harborough (Mr. Farr).
The Government responsibility for crematoria and cremations is divided between two Departments, the Home Office and the Department of the Environment. Essentially in this measure the House will recognise that we are dealing primarily with the absolution from the planning restraints involved to enable the proposed development to go ahead. It is correct to say that in a sense the Department of the Environment is in the lead on this issue.
It is for my Department to offer any Government comment on the siting of the proposed crematorium. I understand the concern felt by those who live and work in the area. I acknowledge the worries expressed by the hon. Member for Leicester, South (Mr. Marshall), the hon. Member for Carlisle (Mr. Lewis) and the right hon. Member for Mansfield (Mr. Concannon) about whether this is an appropriate site. However, I am sure that hon. Members will recognise that that is a matter that the planning authority will determine. The procedures being followed in this measure allow the local planning authority to adopt its normal course of action.
I know that many people take the view that funeral processions are somewhat harrowing. However, the point was well made by my hon. Friend the Member for Loughborough (Mr. Dorrell) that that of itself was not necessarily a matter that should cause us to express concern in legislation. The absence of a garden of remembrance from the site is another factor that causes concern. I understand that that, too, has been taken on board by the promoters and that it is their intention to correct that omission.
However, these are factors that ought to be taken into account in deciding whether the project should go ahead. No doubt they were the kinds of factors very much in the minds of our predecessors when they enacted section 5 of the 1902 Act. I am bound to say that that Act is not necessarily the most modern way of expressing planning permissions, proximities to dwellings, and so on. But they imposed restrictions—and it is right that they should be observed—on the proximity of crematoria to dwelling houses or public highways.
The intervention of my hon. Friend the Member for Harborough has established already that there are a number of precedents for local Act amendments to the restriction on the distance of crematoria from dwelling houses. That is well precedented. What is more, as the House will have recognised, they are almost all for urban planning authorities facing similar problems to that which Leicester city council faces and one of the obvious problems that face Messrs Ginns and Gutteridge and their premises.
These questions of siting and the absence of a garden are considerations that nowadays can and should be taken into account in the planning system. In this case, therefore, the Government do not object to the waiving of the restrictions in the 1902 Act on environmental grounds.
Since the Bill disapplies class XII of the General Development Order, this development is subject to normal planning controls, and the planning aspects are a matter for the local planning authority—in this case, Leicester city council.
The hon. Member for Leicester, South expressed concern that this case would create a precedent for bringing together under one roof and under unified control the two responsibilities of undertaker and cremation authority. To the best of my knowledge, this is permitted by the 1902 Act. It has not occurred up till now, but that of itself should not concern us in terms of the section 5 exemption—[interruption.] I shall dwell on this at length for the benefit of the hon. Member for Leicester, South despite the prevaricating circumstances of the sudden arrival of my hon. Friend the Member for Grantham (Mr. Hogg). The hon. Member for Leicester, South deserves an answer. My hon. Friend the Member for Grantham is merely "ticking" in his usual way that I should resume my seat.
This would not be the first private crematorium. There are some 26 others in operation. But if the Bill is successful and the promoters secure planning consent, it will be the first crematorium controlled directly by a firm of funeral undertakers. There is nothing to stop a firm of funeral undertakers establishing a crematorium that satisfies the existing general legislation, and it appears to be a historical accident that so far this has not occurred. But it is a development that has implications for existing safeguards, and here I accept the remarks of the hon. Member for Leicester, South. My right hon. Friend the Home Secretary shares the hon. Gentleman's concern, because one of the purposes of the Cremation Acts is to prevent cremation being used to conceal the commission of a crime. Such a possibility is extremely rare, but it is important that the safeguards remain.
Under the cremation regulations the medical referee of a local authority is responsible for scrutinising the documentation that is required. He has to see that the regulations are effective and that there is nothing suspicious about the circumstances of the death. He is assisted in this job by the staff of the crematorium.
My right hon. Friend the Home Secretary is giving further careful consideration to whether that job can continue to be done as effectively when the same staff are responsible for making an application for cremation. I can tell the hon. Member for Leicester, South that his point has been taken on board. It is a matter on which my right hon. Friend probably will be able to give assistance at the Committee stage for adequate consideration of this matter.
The right hon. Member for Mansfield argued that a private Member's Bill is not an appropriate vehicle for approval of such a project as it involves the possibility of a fundamental change in the relationship between undertakers and operators of crematoria. It is a matter for Parliament to determine. The Act makes that provision, and there is nothing peculiar in this measure.
Paying due consideration to the points raised by the hon. Member for Leicester, South (Mr. Marshall), the fact that planning provision will apply, and that Leicester city council has given initial outline planning authority and seeks to apply stringent criteria, I believe it right that an opportunity should be given for the promoters of the Bill to persuade the House that the powers they are seeking are justified and for the petitioners to state their case in Committee.
I recommend that the Bill be allowed to proceed so that the issues can be fully considered in Committee.

Mr. Farr: With the leave of the House, Mr. Deputy Speaker, I shall reply briefly to two major points. The hon. Member for Leicester, South (Mr. Marshall) questioned whether it was right for funeral directors to operate a crematorium. I am advised that there is nothing in the present law to stand in the way of that. There may or may not be precedents for it, but it is an incidental effect of the Bill and not part of the permission that Ginns and Gutteridge needs to receive from the House.
The hon. Member for Carlisle (Mr. Lewis) raised a point about the garden of rest. Following research, I understand that no Conservative Member has received the brief from the Association of District Councils to which he referred. If the matter concerns him, no doubt he will approach Committee Members and ask them to deal with it.

Mr. Ron Lewis: The Association of District Councils sent the letter to its vice presidents, which is why I received it.

Mr. Farr: I am grateful to the hon. Gentleman for clarifying the matter.
The right hon. Member for Mansfield (Mr. Concannon) said that there had been many precedents for the Bill, and I dealt with that point in an intervention.
I am grateful to all hon. Members who have shown interest in this important measure.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 88, Noes 54.

Division No. 66]
[8.15


AYES


Aspinwall, Jack
Farr, John


Beaumont-Dark, Anthony
Fenner, Mrs Peggy


Braine, Sir Bernard
Fookes, Miss Janet


Bright, Graham
Fox, Marcus


Brinton, Tim
Garel-Jones, Tristan


Brooke, Hon Peter
Griffiths, E.(B'y St. Edm'ds)


Brown, Michael(Brigg &amp; Sc'n)
Hamilton, Hon A.


Browne, John (Winchester)
Hamilton, Michael (Salisbury)


Buchanan-Smith, Rt. Hon. A.
Heddle, John


Butcher, John
Henderson, Barry


Carlisle, John (Luton West)
Hogg, Hon Douglas (Gr'th'm)


Carlisle, Rt Hon M. (R'c'n)
Howell, Ralph (N Norfolk)


Channon, Rt. Hon. Paul
Hunt, David (Wirral)


Chapman, Sydney
Hunt, John (Ravensbourne)


Clegg, Sir Walter
Jenkin, Rt Hon Patrick


Cockeram, Eric
Jopling, Rt Hon Michael


Cope, John
Lang, Ian


Costain, Sir Albert
Latham, Michael





Lawrence, Ivan
Shepherd, Colin (Hereford)


Lee, John
Skeet, T. H. H.


Lewis, Kenneth (Rutland)
Smith, Tim (Beaconsfield)


Lloyd, Peter (Fareham)
Speller, Tony


Lyell, Nicholas
Spicer, Michael (S Worcs)


Macfarlane, Neil
Squire, Robin


MacKay, John (Argyll)
Stainton, Keith


McNair-Wilson, M. (N'bury)
Stevens, Martin


McQuarrie, Albert
Stewart, A.(E Renfrewshire)


Marten, Rt Hon Neil
Stradling Thomas, J.


Mawby, Ray
Taylor, Teddy (S'end E)


Mawhinney, Dr Brian
Thompson, Donald


Maxwell-Hyslop, Robin
Thorne, Neil (Ilford South)


Miller, Hal (B'grove)
Townend, John (Bridlington)


Mills, Iain (Meriden)
Townsend, Cyril D, (B'heath)


Moate, Roger
Trippier, David


Monro, Sir Hector
Wakeham, John


Mudd, David
Walker, B. (Perth)


Myles, David
Watson, John


Neubert, Michael
Wells, Bowen


Newton, Tony
Wheeler, John


Normanton, Tom
Whitney, Raymond


Page, John (Harrow, West)
Winterton, Nicholas


Pollock, Alexander
Wolfson, Mark


Renton, Tim



Rhodes James, Robert
Tellers for the Ayes:


Rossi, Hugh
Mr. Stephen Dorrell and


Shaw, Giles (Pudsey)
Mr. Christopher Murphy.


NOES


Allaun, Frank
Kerr, Russell


Alton, David
McKay, Allen (Penistone)


Beith, A. J.
Marshall, Jim (Leicester S)


Callaghan, Jim (Midd't'n &amp; P)
Mason, Rt Hon Roy


Campbell-Savours, Dale
Millan, Rt Hon Bruce


Canavan, Dennis
Mitchell, R. C. (Soton Itchen)


Cocks, Rt Hon M. (B'stol S)
Morris, Rt Hon A. (W'shawe)


Concannon, Rt Hon J. D.
Morton, George


Cook, Robin F.
Newens, Stanley


Cowans, Harry
Orme, Rt Hon Stanley


Cryer, Bob
Penhaligon, David


Davidson, Arthur
Powell, Raymond (Ogmore)


Dean, Joseph (Leeds West)
Prescott, John


Dixon, Donald
Price, C. (Lewisham W)


Dobson, Frank
Rees, Rt Hon M (Leeds S)


Dormand, Jack
Shore, Rt Hon Peter


Dunwoody, Hon Mrs G.
Skinner, Dennis


Eastham, Ken
Smith, Rt Hon J. (N Lanark)


Faulds, Andrew
Thorne, Stan (Preston South)


Foot, Rt Hon Michael
Varley, Rt Hon Eric G.


Golding, John
Wainwright, R. (Colne V)


Hamilton, James (Bothwell)
Wellbeloved, James


Harrison, Rt Hon Walter
Whitlock, William


Healey, Rt Hon Denis
Wigley, Dafydd


Heffer, Eric S.
Winnick, David


Hogg, N. (E Dunb't'nshire)



Home Robertson, John
Tellers for the Noes:


Hooley, Frank
Mr. Ron Lewis and


Kaufman, Rt Hon Gerald
Mr. Andrew F. Bennett.

Question accordingly agreed to.

Bill read a Second time and referred to the Examiners of Petitions for Private Bills.

Orders of the Day — Miscellaneous Financial Provisions Bill

Question again proposed, That the Bill be now read a Second time.

Mr. Robin F. Cook: As I was saying, before, to my regret, the House decided to go private, I was in the House during half of the period when the illegal regime in Rhodesia defied the Crown. I was recalling with my hon. Friends that, during that period, there were hon. Members who were happy to extend succour and support to those rebels against the Crown, and that, on the whole, those hon. Members who were prepared to do that were the same Members who pride themselves on a rigorous financial orthodoxy. However, we now see from this clause that those hon. Members, while supporting not simply the most rigorous but the most savage financial orthodoxy at home, were also prepared to support a regime that had welshed on its international financial obligations.
One question arises on the clause, and I hope that someone among the ministerial football team that has come along to support the Minister will be capable of answering it. I understand that there were five different debts on which the illegal regime defaulted, thus triggering our guarantee. Of those five, three are accepted and extinguished by the clause that is now being considered. That leaves another two that remain the responsibility of the present legal Government of Zimbabwe. What is strange about this division is that the two debts that the Government of Zimbabwe are left with are worth more than the three debts that we have accepted. Their debt liability is some £20·8 million; the debt liability that we are accepting and extinguishing in the Bill is £13·4 million. I therefore ask the Minister: why is there this distinction among the five debts? What logic is there in our accepting the liability for part of those debts? Why, if we are accepting only part of those debts, do we accept the lesser part?
Clause 4 provides that Treasury guarantees can be provided on a more flexible basis to cover more flexible borrowing requirements. The Opposition are happy to support the clause, in so far as it goes. Plainly, it is desirable that when public sector bodies borrow, they should be able to borrow on the best terms that are available. However, it is ironic that the House should be asked to consider this clause, which provides for greater flexibility in Treasury guarantees, in the immediate wake of a public expenditure White Paper that provides for a further reduction in borrowing by public bodies. If we look at the table on nationalised industries in the White Paper, we see that the White Paper provides over the next couple of years for a reduction in net external finance for the nationalised industries of no less than 30 per cent. At the same time that nationalised industries are to have a reduction in external finance of 30 per cent., they are expected to achieve the trick of raising investment by 12 per cent. Candidly, I do not believe that that trick can be performed. In my opinion, one cannot make more bricks with less straw. I do not believe that the nationalised industries will be able to increase investment while reducing their borrowing.
Those entries in the public expenditure White Paper are pure fantasy. They are a piece of the fantasy that covered last year's expenditure White Paper, and that stimulated

the Treasury to provide a deficit of £10 million in that White Paper for the shipbuilding industry although in the current year, a year of international recession, there is a deficit in our shipbuilding industry, not of £10 million but of £70 million—all of this is at a time when major public bodies are being allowed, if not encouraged, to place orders for ships in Korean shipyards.
if there is to be borrowing of any amount, it is plainly desirable that that borrowing should be on the most flexible basis. I wish to put a question to the Minister. It is a question that involves Treasury policy, and presumably, therefore, an answer can be obtained tonight: why does the Treasury persist in its perverse policy of counting a Treasury guarantee as an item of public expenditure? It is frankly silly to do so. The risk of default by a major public body is minimal. All that need concern the Treasury is that it has the capacity to honour the guaranteee should it be triggered. If we ever arrive at the state in which the Treasury is liable to be bankrupted by the triggering of one of those guarantees to one of the public bodies beneath the Treasury, we shall be in such financial turmoil that the fall of that guarantee will be a small matter indeed. It is, in truth, a daft practice that acts as an artificial constraint on borrowing for investment and it is high time we had a more realistic system that does not impose an artificial burden on the PSBR every time a Treasury guarantee is offered.
Clause 5 relates to the Crown Estates Commissioners. I say straight away how refreshing it is that at a time when many businesses cannot see beyond the next few months or perhaps weeks there should be one body in the land that finds 100 years too short a time span for effective planning and is therefore obliged to request us to enable it to extend the leases for 150 years. It will not surprise the House that that body trades in property. I doubt whether many manufacturing companies in the length and breadth of this land can see beyond the next 100 days, never mind beyond the next 100 years.
One obvious question arises in relation to this clause and I shall touch upon it only briefly because my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson) intends to ventilate it at rather greater length from his constituency experience. If the House is to extend to the Crown Estates Commissioners the right to increase their period of chief lease, that entitles the House to ask questions of the Crown Estates Commissioners about the terms on which they make that lease available to subtenants or sub-lessees, particularly when there is some evidence from practices within London, some of which have come before the courts, that some of the lessees who have obtained a lease from the Crown Estates Commission appear to have been pioneering techniques designed to avoid the provisions of the Rent Acts. Therefore, I hope that when my hon. Friend raises the matter in the course of the debate he will receive a full reply from the Minister because I suspect that this is one matter to which we might wish to return when the Bill is committed to a Committee.
Clause 6 deals with the extinction of annuities, to which the Minister referred. I felt that he did not do full justice to the colour and background of the clause which clears up the lumber-room of history. I have sat on the last half dozen Finance Bill Committees and in the course of each of those we have spent a considerable time debating at length the treatment of the taxation and excise Jury on alcohol. Throughout those entire six years I was in a state of complete ignorance that each year we were paying £803


to the Duchy of Lancaster on the grounds that it has surrendered the right to levy prisage and butlerage on wines brought into the Duchy of Lancaster. There are one or two hon. Members from the north-west in the Chamber tonight. I would not care to try to describe to the House the response that the Duchy of Lancaster might get were it to stop those hon. Members on their way into the northwest and seek to apply prisage and butlerage on any wines and spirits being brought by those hon. Members into the duchy.
I also find it rather strange that we are still paying £4,000 to the Duchy of Cornwall in recognition of its surrender of the right to mint coins in Cornwall. I am surprised that a Treasury team so committed to the doctrine of monetarism should have waited so long before striking out from the legislation a measure that could have created such havoc with M3 if the Duchy of Cornwall were to seek to reassert its ancient right to mint coins. The Opposition will not stand in the way of sweeping out that particular corner of the lumber-room and we shall happily support the clause.
Among the disjointed parts of the Bill I come lastly to clause 7. Not only do we support that clause, but we warmly welcome and enthusiastically endorse it. Indeed, it is only fair at this point to pay tribute to my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) because that clause is the fruition of his long campaign to achieve recognition of the problem. It is similar to an amendment that he moved during a debate on the Local Government Finance Act 1982 in the last Session. The clause will end an anomaly that deprives many councillors of any allowance if they fall unemployed while in office. I have been a councillor and I am bound to say that there is little understanding among the public at large as to the financial sacrifice that many individuals experience upon entering local government. There is little appreciation of the loss of income, the certain loss of promotion and, in cases that I have known, the loss of pension rights that flow from participation in local authority duties. From experience of people I have known I can say that any unemployed councillor is in a desperate plight. Even when unemployment is low, an employer will not take on an unemployed councillor in the full knowledge that he will have to give him the right to time off to attend to his local authority and civil duties. Therefore, I strongly support the clause, and it will receive the Opposition's heartiest endorsement. However, the need for the clause has become urgent as a result of the explosion in unemployment under this Government, which has affected members of local authorities as well as their electors.
I turn back to the first two clauses, which deal with the promotion of industrial development. We support clause 1, which will widen and strengthen the Development Commission's powers to carry out the promotion of industrial development in rural areas. Indeed, it would be strange if we did otherwise, because it was the Labour Government who greatly expanded the role of the Development Commission in promoting industrial development in the rural areas. I have studied the fortieth report of the Development Commission—it is available in the Library—which confirms how right we were to expand that role of the Development Commission. It also confirms

the valuable role carried out by the Development Commission and COSIRA, which acts as its agency in stimulating small businesses in rural areas.
I noted what the Minister said about COSIRA, and I welcome his endorsement of its work, but I was intrigued to note that the commission's fortieth report contains a reference to it having achieved the target of a 10 per cent. reduction in manpower. Where did that 10 per cent. cut come from? Was it something that the commission thought up, or was it imposed from outside? If the Government proposed to the commission or to COSIRA that there should be a 10 per cent. reduction in manpower, it casts an ironic light on the statements of general support that we have heard today from the Dispatch Box. It is impossible to read the fortieth report without noting the comments on the way in which the Development Commission's role has been made much more difficult by Government policy. For example, the Development Commission notes that local authority expenditure cuts have
hit rural areas particularly hard.
It also notes that it is now more difficult for it to carry out its task of training the unemployed and of retraining those in employment because, as a result of reductions in public transport in the rural areas, those undertaking training have to travel much further and almost certainly have a more expensive journey.

Mr. Frank Hooley: If there is any transport at all.

Mr. Cook: Indeed.
The same paragraph points out that many trainees have to stay overnight to undergo retraining, because there is no transport. That is extraordinary in a comparatively compact country. Above all, the Development Commission repeatedly points out that the economic context of low demand and high interest rates constantly frustrates its efforts to persuade private industry to invest in the rural areas that it seeks to assist. If we acknowledge that problem in relation to the Development Commission's work in the rural areas, we see it writ large in the context of the four English regional development organisations, dealt with in clause 2, which cover a great part of the assisted areas in Britain. I assure the Minister that we shall support the clause and will not stand in the way of putting assistance to those development organisations on a regular footing.
It is only fair to say that the additional resources released by clause 2 are dwarfed by the onslaught on incentives to regional development launched by the Government when they took office and sustained remorselessly since. The Minister with responsibility observed:
Regional policy is obviously likely to be more effective if it is concentrated on a smaller number of areas where there is greatest need.
That might make sense if areas of need were diminishing and contracting. In that context one could understand the case for concentrating resources on diminishing areas of need. All right hon. and hon. Members know that that is not happening. We know that under the present Government areas of need have expanded as never before.
Last July the Secretary of State for Industry made a statement that effectively halved the population covered by assisted area status. The percentage of the working population covered shrank from 47 per cent. to 27 per cent. Within the areas that lost their status that day are no


fewer than 300,000 men and women who are unemployed now, but who were not unemployed in 1979. In each of those areas the problem is worse today than it was in 1979—it is not better.
Concentrating on the areas that were assisted in 1979 understates the Government's epic achievement. The Government's epic achievement is to create areas of urgent need where before there was no need for assistance. An obvious example is the west midlands where unemployment is higher than in Scotland. In the west midlands the largest number of people are chasing the smallest number of jobs. The west midlands has the highest ratio of unemployed persons to vacancies in mainland Britain. The ratio is 49:1. The Government have created in many areas of mainland Britain an unemployment to vacancy ratio which before was known only in Northern Ireland.
The Government's response is further to cut regional development assistance. In the financial year that draws to a close next month £600 million will have been spent on regional development grants. In real terms that is the lowest figure since the mid-1960s when the regional development programme began in earnest. The public expenditure White Paper issued a fortnight ago forecast that in the next financial year that figure, already at a record low, will be cut by a full 25 per cent. to £474 million. We are witnessing, not a concentration of resources in the areas of greatest need, but a cut in resources at a time when the demand and need for the resources are expanding.
Of course we are glad that some support has trickled out of the Treasury in the direction of the four regional development organisations, but when regional expenditure is being butchered we cannot be expected to be thankful. Each of the regions has suffered under this Government but the north-west has suffered the highest proportional increase in unemployment. All regions are bad, but the north-west is outstanding.
In January 1979 about 192,000 men and women in the north-west were unemployed. In January this year about 419,000 men and women in the region were unemployed. Even that figure understates the problem because it is compiled under the new Tebbit index. If we use the comparable basis for the figure collected in January 1979, the true figure for January 1983 is not 419,000 but 447,000 men and women unemployed. That is well over double the rate of unemployment of January 1979.
Even when we contemplate the modest expansion of resources to these development organisations we find an element of controversy. The North of England Development Council applied to the Minister of State, Department of Industry for a grant of £1 million. The Minister gave it £850,000. Since that same Minister is saving £126 million in expenditure on regional development, it is rubbing salt into the wound now to save a further £150,000 at the expense of the North of England Development Council. But the position of the North-West Industrial Development Association is bizarre. Indeed, it has sought a meeting with the Minister of State, which will take place on Wednesday. Unfortunately, that meeting will come after rather than before the Second Reading of the Bill. I therefore hope that the Minister will be able to shed some light on this matter before the House proceeds to give the Bill a Second Reading.
As I understand the background to the controversy, the grant to NWIDA was originally introduced on the basis of a one-to-one formula—for every £1 the Government gave

in grant, the local authorities in turn matched it with £1 of their own. The previous Labour Government changed the formula to be more generous. They introduced a two-to-one formula—£2 was granted for every £1 matched by the local authorities.
In 1980, as part of the Government's general retrenchment on regional expenditure, that formula was undermined and replaced once again with the one-to-one formula. However, there was a catch this time—a catch that was absent when the previous Conservative Government employed the one-to-one formula. The requirement that every £1 of Government money should be matched by £1 of local authority money was reimposed in the context of a savage drop in the resources available to the local authorities, which were unable to honour their part of the formula with the result that in each of the three years since then NWIDA has underspent because it cannot get the matching grant from the local authorities.
In Hansard of 19 January the Minister of State, Department of Industry, said that for the next financial year he will give a grant to NWIDA up to a maximum of £260,000. That figure is completely meaningless. Because of the constraint of local authority expenditure, NWIDA anticipates that it will be lucky if it receives £150,000 from the local authorities in the area and therefore it will be able to draw only £150,000 of the Government grant. Therefore, the Minister's figures are wholly fictitious and misleading.
The interesting question is, why did the Minister retain the one-to-one formula? When NWIDA applied for its grant, it applied to be put on the same basis as the North of England Development Council which has now—we welcome it—been freed from the constraint of matching Government grant with a grant from the local authorities. In that written answer of 19 January, the Minister of State said:
I have not, however, been able to satisfy myself that the requisite degree of commitment to a fully and effectively coordinated regional programme by all the local authorities and new towns in the north west has yet been domonst-ated".— [Official Report, 19 January 1983; Vol. 35 c. 145.]
My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) intervened in the Minister's statement to ask a question on this point. I repeat that question and I hope that, with the time that has elapsed since we touched on this point earlier this evening, the answer will be available when the Minister comes to reply. My understanding is that every local authority and, admittedly only recently, now every new town authority within the area has agreed that NWIDA should act for them in coordinating and liaising on the promotion of industrial development. Given that every local authority and every new town has agreed to that, it is incomprehensible what the Minister means in saying that he demands further demonstration from NWIDA that it has the support of its local authorities. This point is of particular pertinence because I understand that the Yorkshire and Humberside development association proposes to embark on a phased expansion of its budget.

Mr. Campbell-Savours: I intervene because my hon. Friend is referring to the organisation that is responsible for promoting industrial development in my constituency, NWIDA, that operates in the north-west. Does he recognise clearly that the Minister, in leaving the arrangement as it is for NWIDA and leaving the funding as it stands, is, in effect, saying to the north-west region


"You must have second best to the northern region"? It has been acknowledged that the northern region has better funding, but it has not been demanded of NWIDA that the service that it provides to each of the local authorities in its area is as good and effective as that provided by the NEDC. Therefore, lower standards are being imposed in the north-west than in the northern region.

Mr. Cook: I shall respond to my hon. Friend's intervention with some temerity. I am conscious that as a Scots Member I am treading on eggs throughout my observations. In my contact with the regional development organisations during today, each one said that it wished that it could be outside with the Scots. The North of England Development Council felt that it would have been outside with the Scots if it had obtained the full £1 million. It received only £850,000, which, it believes, leaves it 85 per cent. on the way to being out with the Scots.
My hon. Friend the Member for Workington (Mr. Campbell-Savours) is right to raise an issue which I am sure will wrankle with those in the north-west. It is not at all apparent why the north-west has failed to meet a test which has been successfully passed by the North of England Development Council. It has demonstrated that it has the unanimous support of every local authority and development corporation in the area. That was demonstrated by the North of England Development Council. I accept my hon. Friend's argument that the two organisations should be put on the same basis.
The Yorkshire and Humberside Industrial Development Association did not apply for the same basis of funding in the current year because it wanted to see its budget rise in an appropriate and manageable way. However, it has applied for and succeeded in obtaining a significant increase in resources. Next year it will wish to be in the same position as the North of England Development Council and in the position which NWIDA had hoped to achieve this year. It wants some assurance that when it makes that application it will be received favourably. Unless it has that assurance it cannot with confidence plan for the expansion that it wishes to take place in phases.
When the Minister replies, I hope that he will be able to explain the curious chain of reasoning by which he has justified refusing the application, or, better still, say that on Wednesday, when he meets the delegation, he will be expressing a change of heart and will be putting the association on the same basis as that which prevails in the north of England.
I am indebted to The Observer for reminding us that it was precisely 20 years ago yesterday when Lord Hailsham donned a flat cap and went to the north-east as the Minister with responsibilities for regional affairs. He went to the north-east to mark concern and anxiety about the rate of unemployment in the area, which was then 5 per cent. The rate in January was 20·6 per cent. One is bound to say that the Government of which the noble Lord was then a member sprung from a very different Conservative party from the party that created the present Government. The current rate of unemployment is now four times that which prompted the noble Lord's visit, yet we do not see the appointment of a special Minister. We do not see the spurious initiative of a special visit. We do not even see

the purchase of a special hat. All we see is a cut in public expenditure to reduce the moneys available to the regions for regional development grant.

Mr. Campbell-Savours: There are only three Tory Members in the Chamber. Where are the others?

Mr. Dennis Skinner: In the Dining Room, where else?

Mr. Cook: The Cambridge Economic Review has spelt out clearly what will happen if the Government's policy in the regions is continued. It has perceived that by 1990, 800,000 men and women will have been obliged to leave assisted areas in the search for work—half going abroad and half staying here—(Interruption.] As my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) says, it will be the only growth area. Even though those 800,000 people will have left assisted areas by 1990, the rate of unemployment in the assisted areas will be 20 per cent.
On the front page of The Observer, there was a headline that said that the Prime Minister has given the CND what she described as a Hitler warning. If there is a warning to the House from the lessons of that period, it is a warning of the malignant and evil political forces that are released by mass unemployment and leaving a generation of young people without hope. If we are to save this nation from those malignant and evil political forces, it will not be necessary for us to provide additional resources on this scale for development organisations; it will be necessary for us to change the whole thrust of the Government's economic policies. It is perfectly plain from the past four years that to do that it is necessary first to change the Government.

Mr. Frank Hooley: I do not intend to follow my hon. Friend the Member for Edinburgh, Central (Mr. Cook) into all the complications of the Bill. I shall comment briefly on matters that relate to clause 3 concerning the extinguishing of some Zimbabwean debts.
Clause 3 echoes battles that were fought a long time ago. Some of us took part in them. It is a curious reflection on the solemn and slow proceedings of the Treasury that it should take 31 years to write off a debt that was originally incurred by the colony of Southern Rhodesia, which is now, happily, demised. It has also taken the Treasury 25 years to write off the debt of that ill-conceived and unlucky venture known as the Federation of Rhodesia and Nyasaland. Few people will recall that experiment with any satisfaction.
The Sub-Committee on Overseas Development has reported on the Zimbabwean economy. The report relates to debts and the land resettlement scheme. I do not wish to go over the points that were made in that report as it is available to hon. Members and was the subject of a formal reply by the Government. I should like to emphasise that the United Kingdom still owes a debt to Zimbabwe in respect of 10 years of civil war which her people suffered on account of the mishandling and bungling of the federation, subsequent political developments and our failure to put a rebellious, racist regime in its place more vigorously and energetically when the rebellion occurred.
It is pleasant to be able to record that the present independent Government of Zimbabwe are tackling the country's problems with great vigour, energy and some


success in the light of the constraints and difficulties that they face. Last year, or the year before, Zimbabwe had a record maize harvest. It was able to contribute to the alleviation of the food problems in that part of the world. Unfortunately, that has not continued.
The country is faced with serious difficulties on account of the deliberate policy of subversion and harassment by its neighbour to the south—South Africa. In that connection, I am appalled by the recent decision of the Sheffield chamber of commerce to send a trade mission to South Africa. It is intending to expand and promote our economic relations with that country rather than contract them.
The economic problems of Zimbabwe, which will be alleviated slightly by the provisions of clause 3, are compounded by its position as a land-locked country. The difficulty that arises there is that all of its essential supplies of energy have to go through Mozambique and dangerous and difficult country, again because of the unashamed and admitted incursions, attacks and sabotage carried out in Mozambique by the South African Government.
Therefore, I hope that in addition to writing off the debt, which is provided for in the Bill, Her Majesty's Government will look carefully at other possibilities of assisting the Zimbabwean economy directly by such further technical and other assistance as that Government may request and indirectly by making sure that we have good relations with Mozambique, and in particular by helping Mozambique with the communications, oil pipelines and other facilities that are vital not only to its economy but to the economies of the land-locked central states in southern Africa, notably Zimbabwe, Zambia and Malawi.
In a recent report by the Select Committee on Foreign Affairs dealing with the work of the Commonwealth Development Corporation, the Committee suggested that the corporation should not expand its operations unduly to various parts of the world in view of the amount of opportunities that still exist in the Commonwealth. We made a special exception in the case of Mozambique, precisely because of the reliance of the British Commonwealth countries such as Zimbabwe, Zambia and Malawi on communications through Mozambique, by road, rail and in the form of oil pipelines. I hope that in due course the Government will reply to that point.
The other aspect of the economy of Zimbabwe about which it is appropriate to talk in connection with the clause is the Southern Africa Development Co-ordination Conference, which is an organisation set up by the nine states—I do not know whether one can call them front-line states, but the nine African states—immediately to the north of South Africa. It is designed to harmonise and bring together the economic policies of those nine states with a view to providing mutual assistance and development and to overcoming the considerable problems that the states share, not least the subversion and harassment from South Africa.
I hope that in addition to writing off the debts Her Majesty's Government will give serious consideration to how they can best and most profitably join in that cooperative effort of the nine states in the SADCC in helping to build up their economies. Those countries have enormous potential wealth. They could and will in due course provide considerable markets for British enterprise. They are of great significance politically in Africa, because on their democratic development and full

independence will depend the peace, stability and prosperity of a vast area Of the world in the southern part of that continent.
Therefore, I welcome the somewhat belated action by the Treasury in writing off debts that are 23, 25 and 31 years old. I hope that that is a sign that this country is still alive to the debts and obligations that we owe to the newly independent countries within the Commonwealth. I hope that we shall consider these debts and obligations not only directly in terms of Zimbabwe but in the wider context of our relationships with the countries of the Southern Africa Development Co-ordination Conference to see what greater economic assistance we can give to assist in their development.

Mr. A. J. Beith: I do not think that when the Minister opened the debate well over two hours ago he anticipated the strength of feeling that he would meet, particularly from hon. Members from northern constituencies who see the Bill against the background of the enormous unemployment rates and the withdrawal of a number of crucial forms of assistance. If he thinks that it should not be he who is falling victim to the anger of northern Members, he must reflect that we attribute much of the policy that has brought about this unemployment to Treasury thinking. Most of us feel that his Department plays a large part in determining the doctrines under which the Department of Industry has so scaled down its regional assistance. The Bill represents only a very small part of what the north and other regions need to stimulate economic development and growth and tackle their serious unemployment problems.
Clauses 1 and 2 are desirable and of considerable merit. We welcome them, but we are bound to see them against the background of unemployment rates that are extremely high and are growing all the time. In my constituency—in a rural area—the rate is 19 per cent. and over.
Clause 2 deals with the body upon which the north has to depend for the promotion of its needs and the attraction of new industry to the area—the North of England Development Council. The Minister will be well aware from earlier discussions that northern Members feel strongly that that body lacks the teeth available to the bodies in Wales and Scotland, where, although serious problems also exist, the level of unemployment is not as high as in the northern region. It was not until after a long battle involving many hon. Members in all parts of the House that the grant for the coming year was agreed. Indeed, we had considerable fears that it would be much lower. There is still a clear need to get the figure up to at least the £1 million which the NEDC argued was needed. It has a good basis for that argument and for arguing for powers that are far stronger than those it now enjoys.
It would be in some small way consistent with at least some parts of the Government's thinking to recognise that if they gave bodies within the north-east more resources they could get on with the job. Instead of trying to determine from Whitehall—central Government—how the problem of the north-east can be tackled, why not give north-east institutions such as the development council the money and the power to do more about it? They are engaged in a very competitive market trying to attract industry when not only other regions of the country but other countries are trying to lure internationally mobile industries. The development council has a difficult job to


do and it is doing it against a background of Government policies that are directly inimical to a solution of the unemployment problem.
I wish to deal particularly with clause 1, which deals with the Development Commission. It is a commission for which Liberals are bound to feel a warm affection since it was set up by a Liberal Government over 70 years ago. It has remained an extremely active body in the rural areas—now of course only in the rural areas of England.
Its work has been essential, made the more so by the fact that special assistance of various kinds has been withdrawn from many of those areas. Certainly in my constituency it is to the Development Commission alone that we now look for assistance and support. The Government have withdrawn assisted area status from an area with 19 per cent. unemployment. I cannot see or understand the supposed logic of that policy. The Government's intention is alleged to have been to concentrate help on areas where the problems are greatest and unemployment is highest, but they have crossed an area such as Alnwick and Amble off the list. I am glad to say that the Development Commission has certainly not crossed Alnwick or Amble or the Berwick part of my constituency off its list. It has continued to treat it as a rural area with serious long-term unemployment problems that require attention. I welcome what the commission has done.
The essence of the commission's success and promise is its flexibility—its ability to undertake a wide range of measures, to explore new ideas and to break away from the often stereotyped thinking of previous approaches to tackling unemployment. The commission has involved itself in a wide range of rural problems, including the promotion of small industry, the creation of opportunities for craftsmen and the retention and support of essential community facilities such as rural transport, and the provision of transport facilities to get people to hospital. Such facilities are an essential part of life in the countryside and without them it is impossible for people to stay and work there.
The commission has been pioneering and far-sighted in its approach, and its achievements would have been impossible without flexibility. I hope that the new arrangement for the Development Commission and the new pattern of its relationship with the Treasury and the Department of the Environment will guarantee its ability to act flexibly. I hope that Treasury thinking and Treasury narrow-mindedness will not move in to stifle the initiative for which the commission is known.
If the commission is to succeed in its difficult task of regenerating rural areas, it will do so by operating in an independent and adventurous way that is not hamstrung by traditional departmental constraints. It is a small body and in some ways its smallness contributes to its effectiveness. I hope for positive Government encouragement for its work, a positive Government approach to its funding and a better climate in which it can operate. All its good work will be undermined if we continue to have an economic climate in which small firms are under constant pressure and constant threat, and the essential industries of the rural areas cannot operate or compete.

Mr. Charles R. Morris: I do not wish to detain the House for long, but clause 2 seeks statutory authority to make grants out of money provided by Parliament to the four English regional development corporations. I am mindful of the reference to the North West Industrial Development Association, and concerned at the developing economic problems of the north-west.
The unemployment figures for Merseyside are appalling. The problem of unemployment in the former textile areas of north-east Lancashire is equally sad and tragic, and the city of Manchester faces a growing crisis involving the elimination of jobs generally. When the unemployment rate was hovering above 7 per cent. the Government withdrew assisted area status from Manchester and 20 other areas in the north-west. Unemployment is now 21 per cent. in Manchester generally and 44 per cent. for the male unemployed in Moss Side. Unemployment on Merseyside is equally appalling. Yet there is no sign that the Government are seriously concerned about attracting inward investment or promoting the economic needs of the area.
Clause 2 also shows no concern on the part of the Government about the inadequacy of grants to the English regions compared with the decidedly more generous grants that Scotland, Wales and Northern Ireland attract. I am mindful, too, that those areas have appreciably less unemployment than our region. I do not wish to have a competition about the misery of unemployment, but the Government should be concerned about the needs involved and those needs should be met.
I hope that the Minister will respond to the need for clarification of the whole question of development grants. At present, development grants are paid by the Treasury, but the policy according to which they are paid is determined by the Department of Industry. In the new towns, however, the Department of the Environment is involved. Greater co-ordination is required in this area of public expenditure. In the north-west there is a tragic and illogical competition between new town and regional development corporations to attract inward investment.
Nightly on Granada television one sees advertisements paid for by the Department of the Environment—to the tune of £750,000, I am told—to promote the economic development of one new town. That is all very encouraging for that new town, but the industry that it attracts with the help of money from the Department of the Environment is taken from other parts of the same region with even greater economic problems. Serious consideration should be given to making the allocation of public expenditure in promoting development more realistic and taking full account of existing problems.
Finally, the Invest in Britain Bureau does a very effective job in attracting overseas investment, but I wish to examine the situation from the other end. At present, the bureau finances offices in New York, Chicago and other American cities as well as in Tokyo. In the same cities, there are separate offices representing the Welsh Development Agency and the Scottish Development Agency, but none specifically representing the interests of the north-west, which has such major economic problems. How can public expenditure be justified to provide offices in Tokyo, New York, Chicago and elsewhere to promote Scotland, Wales and Northern Ireland in isolation from the United Kingdom as a whole? If the Treasury is concerned


about the efficiency and effectiveness of public expenditure I hope that it will examine that aspect very closely.

Dr. David Clark: I wish to confine my remarks to clause 2. We in the northern region are pleased that the Government are prepared to give almost £850,000 to the North of England Development Council. It would be silly not to welcome the money. However, as my hon. Friends have explained, it is completely insufficient. I had intended to say that it was like prescribing a couple of aspirins when someone needs antibiotics. The insult is greater. It is like offering someone a corn plaster after amputating his foot. That is what the Government are doing. It is an insult to the northern region to be offered this sort of money when action upon action has desecrated and decimated our region, our towns and our homes. Education spending has slumped. Housing starts and finishes are plummeting. Health care is scarred. Road and rail expenditure has been reduced. Added to that, the Government have directly taken action to reduce the number of jobs in the area by moving regional headquarters 100 miles south to Manchester and Leeds. That is not good. We find it regrettable.
I am, however, glad that the North of England Development Council is to receive the money. It is trying to do what it can to help. I wish only that the Government would provide the wherewithal for the job to be done properly. I understand the Government's difficulties. Hardly any Conservative Members represent constituencies in the north and north-east of England. There are about three Conservative Members representing constituencies in the north-east. One can understand that the Government are unaware of what goes on. Our region, like the older industrial regions of Lancashire and Yorkshire, south Wales and the Clyde, built Britain. It was our region that built the ships. It was our region that made the steel. It was our region that dug the coal. That industry now needs rebuilding.
It is ironic that the wealth of North sea oil, which should be used to rebuild the industrial infrastructure of the older industrial areas, is now being used to keep people on the dole. It is for these reasons that the Opposition find the Bill's provisions inadequate. There has been mention of the Hailsham report of 20 years ago. If one looks back 49 years, one finds that another Government were so concerned about areas such as the northern region that they set up a commission. It is incredible to read those reports and to see how the Government are taking us back to those days and to those conditions that the reports reveal. The comments in the reports are as true today as they were then. They refer to the fact that the
psychological effects of the depression are not confined to particular spots, but permeate the whole region.
I give another quotation. It states:
In the course of the investigation it has been impossible to avoid a strong general impression that the area as a whole is losing hope.
That was written in 1934. It could be a prophecy for today. It is because of the experience of the region and because of statements such as that made by the Minister of State last week, when talking about unemployment in the north-east—
We cannot win under modern conditions".—[Official Report, 8 February 1983; Vol. 36, c. 871.]—

that we say that such defeatist talk cannot be tolerated, that we are not prepared to tolerate it, and that we expect better.
If we look at the needs of the region, we find that it is a peculiarly different region. A study of regional economics throughout the world shows that there is always a frontier region—the mezzo-giorno in Italy, parts of the eastern section of West Germany—that are far away from the centre and on the borders of another country or another semi-nation. One finds particular problems in those areas. That problem, I suggest, exists in the northern region. A basic weakness in the north is that there are few indigenous companies. We have few companies with headquarters in the region. That cannot, thankfully, be said to quite the same extent of Scotland. There are major problems in Scotland, and I do not want to enter any auction about unemployment, deprivation and so on, but there is a national feeling in Scotland, and there are national companies with headquarters in Scotland that have a national market. We in the northern region do not have that advantage. In fact, we have a disadvantage.
I have listened to a number of debates about the Northern region, and I have heard hon. Members talk about the wonderful infrastructure in the north-east. That is true if it is judged only in that context, because infrastructure in the north-east is not enough. It is all very well having an excellent infrastructure in a region, but it is important to get out of the region. In the northern region, our great disadvantage is that we have very good communications within the region and to the south, but communications to the north are deplorable and those to the west are not much better. We need an improved infrastructure because it is essential for us to export the goods that we are able to produce in the region.
In this respect, it is interesting to refer again to the 1934 report. The commissioner writes:
My own impression is that the most formidable difficulty lies in the fact that Durham and Tyneside are geographically too remote from what is regarded as the largest market for the sale of those goods which the new light industries are Principally engaged in producing.
That is the sort of need that we have in our region, and we cannot compete with stronger bodies such as the Scottish Development Agency and the Welsh Development Agency unless we have more power at our elbow. As my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris) pointed out, Scotland and Wales have all the advantages of Cabinet representation and all the advantages of having offices overseas. In comparison, we get £850,000 to help our region, and it simply is not enough.
It is interesting that the Conservative Government of 20 years ago had sufficient social conscience and knowledge of the whole nation that they sent Lord Hailsham to the northern region whereas, like Pontius Pilate, this Government wash their hands of it. It is also interesting again to go back to 1934 and see that w hat was recommended was a small board or a single commission to co-ordinate the work locally. That is what we need. I am advocating not a Minister but a small board or development agency that will do the work of the tourist authorities, of the export agencies and of the planning authorities, acting as a complete development agency. Only in that way can we start to get the north going again to the point where it can compete with its neighbours.

Mr. Frank Dobson: I am sorry to intervene in this regional debate, but some of my constituents are having problems with the Crown Estates Commissioners and, consequently, I am, too.
In the Book of Job, we read in chapter 31, verse 35
Would that my adversary had written a book.
The equivalent of that for Members of Parliament is
Would that my adversary were promoting a Bill.
In this case, the Crown Estate Commissioners are promoting a clause in the Bill which gives me an opportunity to air what is going on.
The proposition in the Bill is to extend from 100 to 150 years the maximum lease that the Crown Estate Commissioners may grant. I am much more concerned with their current leases. Some of their shorter ones cause me more concern than the prospect of extending the range from 100 to 150 years.
In my constituency, the Crown Estate Commissioners own a considerable amount of property around Regent's Park. Some of it is extremely elegant and well kept. Some of it is bordering on the inelegant and is badly kept. Some of it is run-down—so run-down that it is seen by the Crown Estates Commissioners as ripe for development or ripe for rehabilitation. I do not share that view. It needs some work and some money spent on it.
One terrace—Colosseum terrace—has been causing considerable concern to the commissioners, and even more concern to the benighted occupants of the run-down housing. Various companies and individuals have been given not long leases, but short leases by the Crown Estates Commissioners. The leaseholders have sub-let, although that is probably not the right description. The houses are in multiple occupation, often occupied by people whose command of English is poor and who, consequently, are more vulnerable than poor people with a command of English to exploitation by unscrupulous landlords. Some of them may be reluctant to raise their problems with anyone because their immigration status may be rather doubtful. I do not like anyone exploiting people because they are vulnerable.
Some of the rents are high. The property is becoming run-down and the companies want a quick killing. For example, one such company is Jay Estates, which has developed, or in some cases copied, a variety of devices to avoid the Rent Acts that Parliament passed to protect the interests of people living in such housing. Some years ago, at no. 11 Colosseum terrace, the firm tried to turn the existing units into what are known as holiday lets. Following intervention by the housing aid centre and the Camden law centre, that was stopped. Its next effort was to turn the flats into bed and breakfast accommodation. Breakfast consisted of packets of cereals, some of which were delivered weekly. That scarcely falls within the usual definition of bed and breakfast accommodation—even in Blackpool at the time of the Labour party conference.
That firm also pioneered what are now called nonexclusive occupation agreements. They are licensed agreements that allow the firm to avoid the provisions of the Rent Acts and remove the protection of those Acts from the benighted people living in the dwellings leased from the Crown Estates Commissioners. It is estimated that as long ago as 1979—about the time that I entered the House—No. 14 Colosseum terrace was raking in about £8,000 a year for Jay Estates.
When the Crown Estates Commissioners were approached by the housing aid centre, an official said that they did not wish to become involved in disputes between lessees and sub-tenants. That was a noble statement, full of social conscience. They also expressed some sympathy with the sound business practices of Jay Estates in seeking to avoid the effects of the Rent Act 1974—passed by the House and by another place—which was intended to be the law of the land and to apply to every piece of property.
More recently, I became involved—as was my predecessor—in the matter. I was approached by a number of tenants occupying No. 12 Colosseum terrace. They complained about scaffolding attached to the house which they believed was dangerous, about the general condition of the property, about defective lighting on the staircases, in common areas and in some of the flats, and about the filthy mess and rubbish both inside and outside the flats. They told me that the agents and workmen who came to the house posed a severe security problem because they did not have duplicate keys, and many of the doors were consequently not secure. Theft was common and difficult to prevent. Unqualified workmen had removed and changed electricity meters. [Interruption.] I do not suggest that there are any bones in the garden, but the same sort of deprived people who went to Muswell Hill were living in this property, which is owned by the Crown Estate Commissioners.
There has also been interference by the landlord, his agent and workmen with postal deliveries to the house. Moreover, there is evidence that the rents are very high, that deposits are required of would-be tenants, and that the flats are barely furnished.
I took up the matter with various people allegedly in authority, including the Crown Estate Commissioners. The registered rent of room No. 7 at 12 Coliseum terrace was £13 per week. Including rates and various other charges that are believed to be legitimate, this amounted to £69·18 per calendar month. The woman concerned had been asked for and was actually paying £121·33 a month. It came as no surprise to me to discover that her command of English is not very good, although I should add that she is perfectly entitled to be in this country. She is also entitled to £576·52 repayment from the landlord. Although the law centre wrote as long ago as December to ask the landlord for the money, none of it has been forthcoming. It gives the lie to what was said to me in a letter of 25 January from the Crown Estate Office about this property:
In fact, it has provided cheap accommodation for a good many sub-tenants over the past few years with few problems until recently".
More recently, the housing aid centre in Camden, on behalf of some other tenants or occupants of that block, wrote to the landlord to complain that the telephone, which is for the use of the tenants and for which they have paid, is at present cut off, that the lock on the front door is faulty, that the bells are not working, that there is rubbish outside the house, that something is wrong with the plumbing, and that there is often a great deal of noise at night from the landlord's agent who comes round and disturbs the occupants—whether he comes for the rent, I am not sure. The environmental health department is also looking into the standard of the property.
So why are the Crown Estate Commissioners letting such peculiar leases to private landlords? In my innocence, I wrote before Christmas to the Crown Estate on the assumption that any lease that it gave required that the


protection to tenants in various parts of landlord and tenant legislation would be sought from its lessees. I was, therefore, surprised to receive a reply which said:
Indeed, so far as the Rent Acts are concerned our lease deliberately and explicitly disbars the sub-tenants from the protection of the Rent Acts".
In my opinion, no public bodies should be issuing leases of that nature, even in the peculiar circumstances of these buildings. In particular, they should not let them to people who can profiteer from private property. This business should be stopped. I hope that as a result I shall not be executed because, if I turn to the original Act, to which this Bill proposes an amendment, I discover that section 1(5) says—and this is a quite amazing power that was granted to the Crown Estate Commissioners in 1961:
The validity of transactions entered into by the Commissioners should not be called in question on any suggestion of their not having acted in accordance with the provisions of this Act regulating the exercise of their powers, or of their having otherwise acted in excess of their authority, nor shall any person dealing with the Commissioners be concerned to inquire as to the extent of their authority or the observance of any restrictions on the exercise of their powers".
It seems to me that the House was a trifle remiss in granting such extensive protection—

Mr. John Home Robertson: Is my hon. Friend aware that I hope to introduce a Bill on 2 March affecting the Crown Estate Commissioners which would, among other things, repeal the subsection that he has just quoted? Would my hon. Friend care to act as a sponsor to that Bill?

Mr. Dobson: I gratefully accept my hon. Friend's invitation.
I should like tonight to propose that if the Bill goes to Committee—although I do not mind the time period of the leases being extended—we should change the law to limit leases of this nature. The Crown Estate Commissioners were letting such short leases with such peculiar provisions in them to protect themselves against the possibility that they would eventually either redevelop or rehabilitate the building. All sorts of public authorities are faced with the dilemma of whether to keep a building empty and thus fully protect their interests or whether to let it so that people can live in it. There are plenty of other ways around that problem without letting such properties to profiteering private landlords. One scheme, which has been adopted by many public bodies, is to let properties to, or reach agreement on their management and occupation by, charitable or other organisations which look after short-life housing for the benefit of the homeless.
I am glad to say that the Crown Estate Commissioners in their most recent letter to me have said that they are considering that approach and that is very welcome. However, it would be appropriate, when the Bill reaches its Committee stage, for the Committee to change the law to restrict short leases so that they can be given only to non-profit-making organisations. That would have merit for those who live in such properties and also for the Crown Estate Commissioners, since if they adopted that course of action their buildings would be better looked after because the organisations that I have mentioned have an interest in maintaining them to provide a decent and secure home for those who live there, unlike private landlords whose interests are served only by maximising the rents and minimising the money that they spend on the repair and maintenance of such buildings. I hope that we

shall have some benefit from this clause, which just happens to have crept into the Miscellaneous Financial Provisions Bill.

Mr. D. N. Campbell-Savours: I wish to make an unashamedly local speech this evening, because the Bill has clear implications for localities and certainly for the locality in the northern region from which I am sent to Parliament. In doing so, I want to apologise to my hon. Friends, particularly those whose constituencies fall within the northern region, because they know that, although my heart remains with them, the administrative arrangements for the control of the county of Cumbria, in the main, including industry and employment, have been switched to Manchester, against, I may say, the wishes of many thousands of people within the county of Cumbria. I hope that one day a Labour Government will consider redressing the imbalances that have been created by that switch.
The debate is important, because it allows us to discuss the issues involved. The public should note that, despite the statements that have been, and will be, made from the Dispatch Box tonight, the Bill makes no additional moneys available throughout the United Kingdom. Under "Financial and Public Service Manpower Effects" it states:
The Bill is not expected to have any material effect on public expenditure in the long term.
We are tinkering with the administrative arrangements for the payment of forms of regional assistance to promotional bodies and with arrangements for the administration of the Development Commission.
During the past few months, as the economy has steadily deteriorated and unemployment has relentlessly increased throughout the nation, the public have waited with bated breath for a U-turn by the Government that would increase the resources made available from the Treasury for industrial development in the regions, but it has never come. The public cannot understand—and the Bill does not help—why, when manufacturing and industrial output is falling, when there is a reduction in the competitive position of British exporters and a declining exchange rate—from which the Government can produce little benefit—the Government are still unwilling to give additional money to companies that desperately need it to resolve their problems in competing with our overseas competitors, particularly in terms of investment.
In the Workington travel-to-work area the problem is acute. The Bill will do nothing to alleviate it, unless the Minister is willing to intervene to tell me that additional financial resources are being made available. Of 1,083 teenagers in the Workington travel-to-work area, 657 have been out of work for the past three months. They ask me a question which I can only refer to the Government: what will the Government do for them? Do they have to wait in the dole queue for the upturn in the international economy which the Government have persisted in telling us for the past two years is about to take place? Many of those young people are unwilling to wait. In many ways they feel a strong sense of hatred for the Government. I do not use that term lightly, but that is the language that they use when referring to the Government, and it is for the Government to respond. In addition, 46 per cent. of unemployed men in my constituency have been out of work for 12 months and the number of unemployed people has tripled since the general election in 1979.
The level of unemployment today in the small and famous town of Maryport in my constituency is as high as in the whole travel-to-work area, including a town in the Home Secretary's constituency, Aspatria, Workington and Cockermouth, and all the small communities that made up that area at the time of the last general election. The Government must be held responsible, yet they refuse to respond in any meaningful way that gives people the assurances that they need for the future.
We are crying out for a regional policy that works, yet we have not received one. The Government turn a blind eye to the problems. Let us consider the public expenditure White Paper and its implications for areas such as mine. In the section on regional development grants there is a reduction from £600 million in 1982–83 to £474 million in 1983–84. Further reductions are provided for in the future. If a general election were not in the offing, I am sure that the Government would have been even more honest in the White Paper and predicted an even more severe downturn in public expenditure on regional and general industrial support and on other forms of regional aid.
The problem is that the Government refuse even to consider the personal tragedy of unemployment. I often hear minor and seated interventions from Government Members which reveal an insensitivity about what unemployment means. Many of us who have never been unemployed will never understand. Those who have never suffered the misery of unemployment must make a special effort to understand what it means and not resist a solution to a major problem.
Many county and metropolitan authorities have set up their own industrial development promotion units. In my area the Labour-controlled county council has made valiant efforts to ensure that Cumbria's case is put in the international forums where decisions on manufacturing investment are taken.
We are on the limit of penalty. What we spend additional to our budgets today is subject to a tax imposed by the Government—the clawback arrangement which the Government have enshrined in legislation. It is a tax on the rates that we levy. It is that which in Cumbria prevents us from spending additional moneys on developing and expanding the industrial and promotion budget. Yet we know that unless we have the added resources in that budget it is with difficulty that we can sell our region where decisions are taken.
The Minister of State referred to a written reply and admitted that the north-west region had as strong a case as the northern region. If the Government had accepted that that was so, they would have ensured that the differential in the allocation to the North of England Development Council and the North West Industrial Development Association was not what it is. A clear principle is identified in that response.
In relation to the northern region, the Minister said:
They have satisfied me that they
—that is, the North of England Development Council and others—
are capable of mounting a realistic and effectively co-ordinated programme of events on behalf of the region as a whole".
Referring to the NWIDA, the Minister said:
I have not, however, been able to satisfy myself that the requisite degree of commitment to a fully and effectively coordinated regional programme by all the local authorities and

new towns in the north west has yet been demonstrated to justify the higher option."—[Official Report, 19 January 1983; Vol. 35, c. 143–45.]
That higher option is a higher level of Government assistance towards the budgets.
In accepting that, the Minister puts the north-west region in a position secondary to that of the northern region, which also feels aggrieved that other parts of the United Kingdom, through the Welsh and Scottish Development Agencies, are in a better position. The Government are dividing and ruling. They ensure that built into their calculations for regional support are differentials that will spark inter-regional arguments about allocations. The Government bear the responsibility for such stupid and insensitive decisions.
My constituents ask me why it is that the Government can find £1 million for every Falkland Islander to secure the development of a remote island in the South Atlantic where only 1,800 people live, but yet they can find only £474 million to cover all regional development grants paid throughout the United Kingdom in the current financial year. The Government have got their priorities completely wrong. We believe that charity starts at home.
The taxpayer demands that investment, if it is available, is placed in this country to secure jobs for our people. They demand an end to the principle that seems to dominate the Government's investment strategy, which is to export our potential investment in the greater interest of financial institutions and to minimise our financial and industrial investment at home, when clearly that is damaging the industrial infrastructure of our manufacturing base.
An interesting document was produced about a month ago by the Regional Studies Association, which carried out an inquiry into the regional problems of different parts of the United Kingdom. In a document entitled "The North in the Eighties", the northern branch in its submission, which all my hon. Friends will have received—it is very much at the heart of decisions that should be taken by the Government today—says in paragraph 22 says:
A body should be set up at the highest level of Government, preferably attached to the Cabinet Office, charged with responsibility for supervising regional investment programmes. Its duties would include the setting of goals and standards for the regions, the maintenance of coherent strategic planning guidelines designed to achieve set objectives and the monitoring of the activities of all central Government Departments, nationalised industries and related agencies against these guidelines. This body should formally advise the Prime Minister and Cabinet colleagues, as well as Departments and agencies concerned, of any major inconsistencies between national and regional strategies. In the latter context it may be necessary to require Departments to prepare annual assessments
I hope that the Treasury Minister will take note—
of the likely regional impacts of their spending proposals and longer-term strategies as well as a statement on the extent to which their plans for previous years were realised.
The document then goes on to refer to the need for the information of development corporations, along with a possible development agency—which is the policy of many of my hon. Friends—for certain regions of the United Kingdom.
The case being put forward is that in any decisions that are taken on the allocation of public expenditure there should be a built-in consideration of the regional impact. That would have a major bearing on our areas. The Government in their derelict land reclamation arrangements have now built in an incentive in favour of parts of


the United Kingdom other than the areas of high unemployment, such as the northern region. That principle should be reversed.
The derelict land grant is a formidable mechanism for channelling public expenditure into the regions. We believe that the Government have a duty to reverse the current arrangements under the development land grant and that in all further allocations of public money—apart from that for public transport—within the substantially reduced sums in the public expenditure White Paper they should ensure that there is a regional emphasis to help resolve and reduce the problem of unemployment.
Finally, I should like to refer to what is happening in another country, which should have some bearing on our debates. The system of regional aid in France is much better than ours. Industry and Treasury Ministers would do well to consider the publication entitled "European Regional Incentives 1982", which has been edited by two lecturers at a university in Scotland—Mr. Douglas Yuill and Mr. Kevin Allen. It is a formidable publication. It outlines the various arrangements that exist within the European Community for the payment of regional aid. What it shows is that—

It being Ten o'clock, the debate stood adjourned.

Ordered,
That, at this day's sitting, the Miscellaneous Financial Provisions Bill may be proceeded with, though opposed, until any hour.—[Mr. Garel-Jones.]

Question again proposed, That the Bill be now read a Second time.

Mr. Campbell-Savours: The publication shows that the French are in a substantially better position than we are in the United Kingdom. The French do not have a direct equivalent to rates, but they have what they call a local business tax, which is referred to as taxe professionnel. It appears to be their equivalent of rates. The concession against that tax payment is available in principle in an area covering 76 per cent. of the French population, whereas in the United Kingdom, enterprise zone status, which is our rate-relieving arrangement, is available in only 15 or 16 areas. That will be the position when the most recent tranche of money under the enterprise zone programme is made available which will be by June.
The French obviously believe that their local business tax is a successful way of helping their industry. The Government should consider the systems of regional aid that are available in France, especially as the form of relief which they employ is so widespread. It would be popular among British industrialists. It certainly would be very popular among supporters of the Development Commission, which is responsible for the development of industries in rural areas. I feel sure that if the Minister were to speak to that lobby, to the CBI and to other representative organisations throughout the United Kingdom he would find that they all favour such a measure.
I have no doubt that the Minister of State will be one of the Ministers representing the Treasury when we consider the Finance Bill in Committee. No doubt he will be with us for some months. I ask him to accept that the French system is a damned sight better way of spending Government money than handing back capital gains tax and capital transfer tax moneys to the better off in society.

Mr. Harry Cowans: The real tragedy of the debate is the mass of empty Benches on the Conservative side.

Mr. Dobson: The Tories do not care. They never have done.

Mr. Home Robertson: There are more civil servants here than Tories.

Mr. Cowans: Not one SDP Member has appeared in the Chamber throughout the debate.

Mr. Tristan Garel-Jones: Cheap.

Mr. Cowans: Yes, it is extremely cheap. That is demonstrated by the mass of empty places on the Tory Benches. When we had a northern region debate Tories entered the Chamber and spent a long time discussing various items and prevented Labour Members, who had valuable contributions to make, from participating in the debate.

Mr. Garel-Jones: Cheap.

Mr. Cowans: This debate is a continuation of the regional debate in another guise. Where are the Tories tonight? In expressing this criticism, I make one exception. The hon. Member for Berwick-upon-Tweed (Mr. Beith) spoke in the regional debate and he is present tonight. He is the only exception that I can make. During the debate on the northern region, hon. Members who have no connection with it flooded into the Chamber. If they felt so deeply about the subject, where are they tonight? That is a reasonable way to stall the Bill. The tragedy is that—

Mr. Cook: I am grateful to my hon. Friend for giving way before he gets to the tragedy. Will he draw attention to the fact that four regional development organisations are mentioned in the Bill? One of them is an industrial development bureau for De von and Cornwall. My hon. Friend is aware that Opposition Members who represent the other three regions—the north-west, the north and Yorkshire and Humberside are present. We have not been favoured with the presence of one hon. Member for Devon and Cornwall, although that region is clearly implicated in the clause. Not one hon. Member from the Conservative or Liberal parties which are well represented in that area, or the Social Democratic party, has participated on behalf of that region.

Mr. Cowans: That is part of the empty seat policy. The Conservative party has the majority of seats down there, but, equally, the Liberals represent the area. What will their constituents think of their lack of attention when, increasingly, questions about Devon and Cornwall and its unemployment figures are asked? When there is an opportunity to speak on behalf of that area, the hon. Members who represent it are conspicuous by their absence. The public will recognise that their representatives were not present when it mattered and when they had a chance to speak on behalf of their constituents. It is not unreasonable for the public to be aware of that. Devon and Cornwall is suffering, not as badly as the north-east, I admit, but suffering, yet not one representative has deigned to come to the Chamber.

Mr. Bob Cryer: Does my hon. Friend agree that those Tory Members of Parliament and possibly


the Liberals from Devon and Cornwall would be among the first to deny water workers and manual workers the same wages—

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. We are debating whether to give the Bill a Second Reading. Hon. Members should confine their speeches to that issue.

Mr. Cowans: I should hate to incur your wrath, Mr. Deputy Speaker, by pursuing that line. Nevertheless, there is some truth in what has been said.
The Bill is comparatively short. One could argue that it is a typical Treasury Bill in that it looks as though it says a great deal yet it misses much and ends up saying nothing. As my hon. Friend the Member for Workington (Mr. Campbell-Savours) said, there are no extra finances in the Bill. Opposition Members find themselves in the eternal dilemma in that the Bill provides a small number of crumbs—one could not argue that there is a crust—for which we must be grateful. It is sad to be faced with a Bill that provides crumbs when large loaves are required, especially in the north-east.
Nothing in the Bill does anything to solve what the Secretary of State for Employment described as an extraordinary problem in the northern region. Taking those words to their logical conclusion, I submit that the Bill is an opportunity to take some extraordinary measures to solve that extraordinary problem. No such measures have been taken. The Minister said that the Bill is purely financial. That is true. However, anyone with a grain of sense knows that the Treasury rules everything. The Minister may smile, but that is fundamentally true. Under the Bill he could not accept what the north has been lobbying for, demanding and arguing for—a development agency—but he could have written into the Bill the financial arrangements which, while not giving the power of a development agency, would have given the finance. That would have been half the battle. However, none of that is provided. The Bill is remarkable not for what it contains, but for what it lacks. It falls short in many ways of meeting the extraordinary problem highlighted by the Secretary of State for Employment. There are no extraordinary measures in the Bill to meet the problems of the northern region.
I am grateful for the crumbs in the increased budget of the north-east development council. However, that is a financial argument that still falls short of what that body requires to do the job that must be done. Wider financial powers are required to solve these extraordinary problems.
The finance has been increased, and we are grateful for small mercies, but the remit within that financial commitment does not equal that of the Welsh or Scottish Development Agencies. I appreciate that the development council's remit could not be spelt out in a purely financial Bill, but the financial commitment could have been. My hon. Friend the Member for Workington said that the Bill provides no new money. I go further and say that there is a reduction.
In their public expenditure White Paper the Government have reduced regional aid by 25 per cent. Therefore, this "extraordinary problem" which has been highlighted by Ministers is receiving 25 per cent. less than it did before they discovered that there was an extraordinary problem. Is it not extraordinary to solve an

extraordinary problem by reducing the financial commitment? If that is not the logic of the lunatic asylum, I do not know what is. The Bill will do nothing to help solve the problems in the northern region.
I make no special plea for my constituency, as other hon. Members in the northern region can match the figures that I am about to give and, in some cases, surpass them. There is 31 per cent. unemployment in Newcastle upon Tyne, Central. No doubt my hon. Friends the Members for Easington (Mr. Dormand), Jarrow (Mr. Dixon) and Workington can match that figure, but that only emphasises the size of the problem in the region.
Clause 2(2)(a) lists
the Devon and Cornwall Development Bureau".
It is sad that there is no one on these Benches to speak for the area. It is not my remit to do so. People outside the House will take cognisance of the fact that there is no one here to represent that area's case. That cannot be said for the northern region, for Humberside or for the north-west. Representatives have been here. Not everyone might agree with the case, and the Government might take no notice of it, but representations have been made. Where are the representatives from Devon and Cornwall?
Paragraph (b) lists
the North of England Development Council".
We have assessed the situation not out of fantasy. We have looked at the various bodies in the northern region. After a long debate and a lot of heart searching, we have decided that the best way to co-ordinate efforts and to use the available finance is through a northern development agency. It could co-ordinate the financial commitment throughout the region. It would have the same powers as the Welsh and Scottish Development Agencies. Nothing in the Bill provides that, and there is no extra finance. I hope that the Minister does not ignore that point when he winds up.
There is a wonderful and typical Treasury argument about the power to
make grants to any body within subsection (2)".
Subsection (2)(e) states—this is wonderful; it may be the Minister's answer to the argument that I have just put about finance—
any other body, whether corporate or unincorporate, whose principal object appears to the Secretary of State to be the promotion of industrial or commercial development in an area in England.
It does not say "in the areas mentioned under (a), (b), (c) or (d). It says
in an area in England.
Although apparently we are not to divide the House, I hope that the Minister will answer our questions.

Mr. Prescott: We will think about it.

Mr. Cowans: I am open minded about dividing the House until we hear the Minister's reply.

Mr. Prescott: Is the Minister open minded? What exactly does the phrase in paragraph (e) mean?

Mr. Cowans: We shall find out when he replies.
Will the Minister cast his mind in this direction? Who qualifies? Is it a body of local authorities which combine together for industrial development and, to use the words of the Bill, promote "industrial or commercial development" in the north of England? Would they qualify for a grant? Does the Newcastle city council, which operates community workshops to promote
industrial or commercial development in an area of England


qualify? Does the Tyne and Wear council, which operates something similar and also has an advanced technology workshop, qualify? Is this the Minister's secret weapon to put more finance into the northern region or is it just gobbledegook—the Treasury laying down rules but making it impossible for anyone to qualify? That requires an answer.
Moreover, even if the northern region or some other region passes the Treasury test so that it actually reaches the starting gate and qualifies, what amount will be available under subsection 2(e) and what will be the determining factor? In an amazing statement earlier today, the Minister of State said that regional grants were based on "geographical position". Does that mean that, whatever the sum available, the organisations concerned will be considered in relation to unemployment in their areas or to the social needs of their area? There is no qualification in the Bill. Perhaps the Minister will answer that, as it may be—I suspect that it is—the case that a whole host of bodies in the northern region could qualify under subsection 2(e).

Mr. Jack Dormand: I am delighted that my hon. Friend noticed that phrase, which was used in relation to a question from me at Question Time today. It is astonishing to say that one of the criteria should be geographical position. My hon. Friend asks the Minister what are the criteria. I think that one can guess. The main and sometimes the only criterion for the Government is market forces, and the chances of anything for the north of England are virtually nil. As we all know, everything goes to the south-east.

Mr. Cowans: By pure coincidence, I was sitting next to my hon. Friend when the Minister of State gave that answer. I noted the words used and spent the following three hours analysing the relevance of geographical position to regional policy in the determination of regional aid. Perhaps the Minister will tell us, as that reply is very germane to what happens under subsection 2(e). What does "geographical position" mean? Does it mean that those nearest London will receive most because proximity to London is a geographical advantage? Does it mean that the area with the head office will receive the regional grant? With the greatest respect to the Minister, all of those questions must be answered in this debate.
I hope that we shall not get a short, sharp answer from the Minister, because if the answer is wrong the whole Bill is nonsense. How can we talk about regional aid—I emphasise the word "regional"—if the aid is determined according to geographical position? It is not regional aid. All the money, albeit a small amount, that has so far gone to the north-east development council could be taken away under subsection 2(e). That is nonsense in anyone's terms. It highlights the Government's non-policy. It is nonsense to insert such a clause in a regional Bill without any qualification. I says nothing about who qualifies or what are the criteria for qualification.
I am attempting the impossible in trying to put into the Minister's head what clause 2 means. I am, perhaps, a super-optimist. Under clause 2, he could write into the Bill qualifications of high unemployment, social need and deprivation to permit grants to be paid. If the Minister did that, he would have some justification for saying that he had some sort of regional policy. If he does not do it, the clause becomes nonsense. It is possible that the bodies that

qualify under clause 2(2)(e) could include co-operatives in the north-east? If the Minister does not possess a copy of a document called "Co-operatives in the local economy" by the Northern Region Co-operative Development Association, I shall pass him a copy. If he read it, he would be better informed about how he could use that part of the Bill.
There are similar bodies in the constituencies of many hon. Members representing northern constituencies. I am sure that there are also such bodies in the north-west and in Scotland that would be able to qualify if this was written into the Bill. It would enable the Government to put their money where their mouth is. Is there new money available? Or is the Treasury, with its usual cleverness, dissipating the amount of regional grant? Does it see clause 2(2)(e) a means of rot paying anything? This needs to be clarified.
One day, when a shaft of light appears, the Government will realise that it is only through a regional development agency and a co-ordinated regional policy for the northeast and other regions—it is a tragedy that other regions are catching up the north-east in unemployment terms—that the regions will be helped. We want parity with the Welsh Development Agency and the Scottish Development Agency rather than the hotch-potch of non-regional policy.
On clause 7, I give the Minister the good news first. I am delighted to see this clause. Much is stated about people going into local government as if they were reaping the moon and the stars. That is not true. Little is written about the other side of the coin. The clause is long overdue. I congratulate the parliamentary draftsman. Clause 7 is long overdue. But I am a little disappointed to discover that it is not retrospective. Before coming into the Chamber, I looked through my files, and I happen to have with me a copy of the amendment that I moved to the Local Government Finance (No. 2) Bill on 25 February 1982. I accuse no one, but if there were two mirrors in the House and one held up my amendment and clause 7 together, it would be difficult to find any difference in the reflections. I am pleased to see the clause, but I hope that the Government will not take credit for it as though it was the new Jerusalem and they had just discovered it.
It was not right to put my amendment into another Local Government Finance Bill, yet here it is in clause 7 of the present Bill. If my amendment had been incorporated into last year's Bill, a lot of people would have been helped a great deal earlier.
There is a problem here, and it is more acute under this Government. Before the start of the financial year, a local councillor has to choose between the financial loss allowance and the attendance allowance. But the financial loss allowance is payable only if the person claiming it is working. Obviously there can be no financial loss if he is on the dole, so it cannot be claimed by anyone who is on the dole. Under the circumstances which prevailed, a councillor had to make that choice prior to 31 December. But on 5, 6 or 7 January, he could be made redundant, and his financial loss allowance went. It means that the position was even worse than my hon. Friend the Member for Edinburgh, Central (Mr. Cook) suggested. Not only could that councillor not qualify for the financial loss allowance; he could not qualify for attendance allowance. Even worse, because he carried out his public duty and attended committee meetings, he could not claim


unemployment benefit. In that way, there was a three-way attack on members of local authorities who were giving their time to do a job of work.
Clause 7 redresses the balance, and I am grateful for that. However, I hope that the Minister will acknowledge that, if my amendment had been accepted in February 1982, a lot of people could already have been helped. Better late than never; better a death-bed conversion than none at all.
Subject to the House receiving the clarifications which have been asked for, I hope that the Bill—with clause 7 in mind especially—has a speedy passage through the House. Having said that, I am deeply concerned that no effort has been made in the financial provisions to name the regions that could be helped more. By putting some financial commitment into the Bill, we could have helped to solve that extraordinary problem. None of that has been done. Until that is done, there will always be a regional problem. It is made much worse by the Government's policies. They have put people out of work 20 times faster than any other Government. If they can do that, they must put the wherewithal into the regions to reverse the process that they began.

Mr. Don Dixon: I shall confine my remarks to clauses 2(2)(e) and 7. My hon. Friend the Member for South Shields (Dr. Clark) referred to the 1934 Act. That was prior to the Jarrow march, when the president of the Board of Trade was a Mr. Walter Runciman. A deputation from the Jarrow council went to see him about the high unemployment in that area. They were told that they had to work out their own salvation. When the previous Secretary of State for Industry—now the Secretary of State for Education—attended a meeting in Newcastle a couple of years ago, he said that people would have to help themselves.
South Tyneside local authority is shared by my constituency and that of my hon. Friend the Member for South Shields. It has tried to help itself. It set up an industrial fair which, for the past four years, has endeavoured to attract industry to south Tyneside. It has been financed by the local authority. I hope that the Minister will say whether clause 2 will allow south Tyneside council to obtain finance to continue the fair, which has been successful and is accepted by the Department of Industry, the northern CBI and everyone concerned. Because of current restrictions on local government expenditure, it cannot produce the fair this year. I hope that clause 2(2)(e) will provide assistance for south Tyneside district council.
My hon. Friend the Member for Edinburgh, Central (Mr. Cook) referred to the number of vacancies in one area. In Jarrow, 6,068 people are unemployed, with only 78 vacancies—that is about 77 people chasing every job. The Government are cutting expenditure in the regions. They have given the North-East Development Council £850,000 to promote work, but they are spending £1,000 million on unemployment benefit.
My hon. Friend also mentioned the shipbuilding industry. Twenty per cent. of those working in that industry work and live in the northern region. Britain is going through a world recession, and the north is being hit hard. Last week it was announced that south Tyneside

would suffer another 1,400 redundancies in the ship repairing industry, with another 1,800 declared for the shipbuilding industry. It is absolute nonsense to confine British Shipbuilders to a loss of £10 million while it costs £5,000 a year for every shipbuilding worker on the dole. That is the economics of the madhouse.
My hon. Friend said that by 1990 about 800,000 people will have left assisted areas. They will be the young and active. When they leave—whether on their bikes, or whether they are going down to certain places to mend gates—they do not take with them the community centres, parks, libraries, hospitals or old people's homes. Those are left in the area, to be financed by an aged population. This Government's policy of cutting back local government expenditure places a tremendous burden on the people left in areas such as south Tyneside.
The northern region has always been top in the unemployment league, whether under a Tory Government or a Labour Government. We have suffered under regional policies, whether they be the carrot on the stick, or whatever. The best time we had was when the fellow came along with the cloth cap and did something for the infrastructure of the region.
Clause 7 was mentioned by my hon. Friend the Member for Edinburgh Central. Before I came to this House I served on a local authority for 20 years. When the attendance allowance came in in 1974, in spite of what the newspapers said—the local newspaper in south Tyneside still gives a league table of the amount of money that councillors claim in attendance and subsistence allowances—many people went on to the local authorities, and, in spite of the attendance allowances, lost money. They not only lost money in wages, but they lost chances of promotion and had their pensions restricted.
Clause 7 is welcome, because at present, if someone opts for the financial loss allowance and is declared redundant, he cannot claim an attendance allowance. As my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) said, not only could he not claim attendance allowance, but he could not claim financial loss because he was not working, and he could not claim unemployment benefit, because he was unavailable for employment, as he was carrying out local government work.
I shall confine my remarks to those two clauses, so that others of my hon. Friends may speak.

Mr. Bob Cryer: I am keen to comment on some of the clauses—for instance, clause 2—that my hon. Friends have mentioned, particularly as there is a reference to the Yorkshire and Humberside Development Association. Naturally, that association requires Government grants which
The Secretary of State may out of money provided by Parliament make",
to put forward the claims of Yorkshire and Humberside to the various investment projects that are being made. It needs the money because, among other things, there has been a significant loss of jobs in this textile area. It has not been anything dramatic, but it has been a continuing erosion of jobs, as the latest news bulletin from the wool textile and clothing industry action committee for February this year demonstrates. For example, in 1979 in the textile clothing and footwear industries, centred largely on Yorkshire and Humberside, there was a job loss


of 30,000; in 1980 it was 93,000; in 1981 it was 112,500, and in 1982 it was 31,000. Naturally enough, the Yorkshire and Humberside Development Association is much needed to remedy the loss of over 200,000 jobs in the clothing, textile and footwear industries since the Government took office.
In my constituency the Conservative achievement has been to increase the level of unemployment from 4·5 per cent. in 1979 to over 14 per cent. There are some areas in Keighley with the level of unemployment mentioned by my hon. Friends. In certain areas there will be between 20 per cent. and 25 per cent. of male adults unemployed, many of them unemployed for one, two or more years. Another Conservative achievement has been that the number of people of working age in receipt of supplementary benefit paid from the supplementary benefit office at Worth House, Worth Way in Keighley has increased by over 200 per cent.
The Prime Minister is given these days to talk about Adolf Hitler. Let me remind the House that she has done more damage to British manufacturing industry than Adolf Hitler ever achieved in the years between 1939 and 1945. If the Prime Minister is to draw parallels between Adolf Hitler and the campaign in the 1930s and 1940s and the position today with regard to nuclear weapons, she will find herself up against a strong argument indeed.
I want to confine my remarks today to the damage that has been caused by the Government to British manufacturing industry and the need for a development association in Yorkshire and Humberside to counter that damage. One of the difficulties that we find in the legislation before us tonight is that several development associations are mentioned. Clause 2(2) (e) says that grants shall be made to
any other body, whether corporate or unincorporate whose principal object appears to the Secretary of State to be the promotion of industrial or commercial development in an area in England.
That is quite extraordinary. My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) raised the question of regional development assistance. That is not just something that appears necessary to the Secretary of State. It is fairly carefully defined by the Industry Act 1972 as amended by the Industry Act 1975. I am unhappy that the Secretary of State should have power to give grants to
any other body … whose principal object appears to the Secretary of State to be the promotion of industrial or commercial development in an area in England".
That is far too wide in its power.
In a recent Adjournment debate I raised the question of the ending of intermediate area status for Keighley, which was accompanied by the massive increase in unemployment that I have already described whereby roughly 4,000 people in Keighley are now chasing about 80 jobs a month. A letter was sent to the local paper by a gentleman who suggested that perhaps it was not good to mention the difficulties that were besetting Keighley and asked whether it would not be better for a few decent industrialists to get together and promote Keighley, to put on one side all the nasty comments about so many people being unemployed, and to promote the good side of Keighley.
A few months later that gentleman turned out to be not promoting industry for Keighley but promoting funds for the Conservative party to promote parliamentary candidates in Bradford. No wonder he did not want the

dark side of Conservative policy to be highlighted. He was up to his neck in defending the shoddy record of this rotten Government.
We certainly need some sort of organisation that will try to counter the difficulties that arise, but unfortunately it looks as though things will get worse rather than better. If the grant is made to a reputable organisation such as the Yorkshire and Humberside Development Association that is one thing, but the wide powers to give money to any organisation seem to me to be much less desirable.
Page 37 of the current issue of "Economic Trends" from the West Yorkshire metropolitan county council states:
The Manpower Services Commission estimate that the number of long term unemployed will increase by up to another ½ million in about 18 months' time. In West Yorkshire, this could mean that about 65—70,000 people would have been cut of work for a year or more, compared with just 12,500 in January 1979. To cope with this trend, the MSC has suggested to Government that a special package of measures should be instituted to assist particular deprived groups within the long term jobless i.e. young adults, those with dependent families, ethnic minorities and older people.
However, grants to the Yorkshire and Humberside Development Association and the other development associations simply are not enough. Of course, everybody in Yorkshire and Humberside wants his case for potential investment presented. The same is true of all those in the regions particularly hit by unemployment, which are mentioned in clause 2. No matter how large the grant, it will not be adequate. Millions of people, and particularly the 3·5 million to 4 million who are on the dole, want a complete change of economic policy, so that those regions particularly affected by unemployment are at the margin, and do not reflect the whole nation.
For example, we should stop the free flow of capital and restore exchange controls. We should get out of the Common Market so that we can run our economy without being subject to the decisions of Brussels and to the secret meetings of the Council of Ministers. We need massive injection of public funds into the public utilities to create jobs. The Government always accept that argument for defence expenditure, but not for anything else. However, when we come to the defence debate—and the Government will soon use it as part of their co-ordinated campaign against the peace movement—the Government will say that public expenditure on the defence industries will create jobs. But the same is also true of the civil industries. We need massive public expenditure to create jobs. At present between £10 billion and £12 billion goes on unemployment benefit, supplementary benefit and on lost tax revenue. That money should be spent on creating real jobs, because we must take people off the dole queue.
Although grants to the various development associations are welcome, they are simply not enough. There is a danger that development associations will go cap in hand to the multinationals, asking them to move to their regions. That is Government policy at work; setting man against man. They believe in competition and they like one region to compete against another, offering further inducements. When that happens, power is handed over to the multinationals. For example, American Hyster builds forklift trucks but is telling part of its Scottish work force that it must either accept a wage cut or the company will pull out and close the factory.
Under the Tories we are moving not forward, but backward to the 19th century, when the mill owner trampled on the rights of the work force. Who should turn


up speaking on behalf of the multinationals but a Minister from the Scottish Office. The message is "Take a wage cut lads, otherwise these people will move out of the country and take away your jobs completely." That is the danger of being subjugated by the multinationals. That is the danger of supplication, and of going round the world with a begging bowl, asking companies to invest here. Investment should be made on terms that are beneficial to the people as a whole, and not on terms that are beneficial to the multinational companies and their shareholders.
The Government constantly talk about the market place. At Question Time the Prime Minister utters clichéridden platitudes about competition and says that we are not making our way in the world because of our lack of competitive force. She does not mention the over-valued pound, the hidden import controls that other Common Market members use, but which we do not, even though the Government have investigated them. The Government seem to think that the end of civilisation would arrive if we acted on them.
For example, what about the outrageous suggestion that imported goods should be examined to ensure their safety? What would have happened if, instead of all those Polish light bulbs exploding when people put them in the socket and turned on the electricity, they had been checked before they were sold? What a ridiculous idea for the United Kingdom! What if all our imported factory machinery was examined for safety before somebody's finger is cut off because a guard or other design factor does not measure up to British standards? Of course, we do not make such examinations, but the Prime Minister ploughs on, speaking as she always does in italics, about how we lack competition.
What about the rural areas? Competition does not work there. If the Government are so worried about subsidies, let them stop subsidising the farmers. The principle that governs the Tories is greed, not competition. If their chums in the farming community can get their snouts in the trough, that is so much the better for them.
The rural areas do not allow market forces to depopulate those areas, although that is happening as people seek jobs because of the decline in rural communities. They set up, properly, development commissions to replace the development commissioners. They establish development commissions with powers set out in clause 1 to encourage industry to
(a) make grants and loans and give guarantees … (b) acquire land … (c) provide or facilitate the provision of premises for occupation by industrial or commercial undertakings; (d) form, and hold controlling or other interests in, bodies corporate; (e) act alone or with other persons, either in partnership or otherwise.
That is a package for detailed state intervention in the rural communities. Why not? If the Government are prepared to intervene in rural communities, what about the urban communities that are being laid to waste by the Government? The truth is that the Government are operating the pork barrel principle—they give money where their supporters are and hang the rest. The Government do not command many votes in the urban areas and they are not bothered about an urban development commission to help the people to
make grants and loans, … acquire land or other property

or give them other enormous powers, which I welcome. Why do they not give the same powers to the urban areas? Why do they not encourage the development of real jobs, not just the training schemes—which, of course, I welcome because they help to alleviate the enormous problem caused by Government policy? It is interesting that the Government should have such comprehensive legislation for the rural areas which could be useful for the urban areas. I hope that the Government will change their mind and establish a development commission for the urban areas so that powers can be used when needed.
I know that my hon. Friend the Member for Berwick and East Lothian (Mr. Home Robertson) wishes to speak, no doubt about Scottish matters, but I am concerned that in a miscellaneous Bill of this nature the representations that I have made about including legislation to give grants in certain areas for repair grants to post-1919 houses are not heeded.
The Bill contains in the schedule at least two modifications to legislation which is the direct responsibility of the Secretary of State for the Environment. I have suggested to him that if there are any legislative problems—I do not believe that there are—to allow him to take up selected areas such as Stocksbridge in my constituency and to give post-1919 houses repair grants, he should seize the opportunity provided by the Bill. I am disappointed that there is no reference to this in the Bill. I have written to the Secretary of State asking him to use a miscellaneous powers Bill of this character to remedy any lack of power that he might claim prevented him taking action.
Stocksbridge in my constituency has been blighted from 1968 to 1982. Now, happily, the path of the Airedale trunk road has been decided and the blight has been removed. But for that period of time—14 years—almost 20 owner-occupiers have stuck it out. Because they were never sure that the motorway was to come through, they deferred repairs. But because the houses are immediately pre-1939, the owners find that they are not eligible for repair grants. It would be reasonable if the Government, who are supposed to be concerned about owner-occupiers that the houses have been blighted, though the fault of the Department of Transport's proposal made in 1968, and carried on by successive Governments until eventually, in 1982, a decision was made to fix a route that lifted the blight. Why cannot the Government give them repair grants because of those special conditions? It might also apply to other areas.
If other areas have the same deserving case, why should it not apply to those other areas? Why should owner-occupiers have to suffer if, as a result of a Government proposal, there is an accumulation of outstanding repairs for the perfectly proper reason that owner-occupiers felt, jutifiably, that it might not be worth spending money because they never knew the position from year to year? They should now be eligible for a repair grant.
I urge the Minister, even at this late stage, to contact the Secretary of State for the Environment to see whether an amending clause could be added to the Bill to get the powers. If there is any doubt—at one stage of the exchange of correspondence the Secretary of State said that he may not have the powers—let us have a clause added to the Bill to bring some relief to people who justifiably deserve help.

Mr. John Home Robertson: This is a spectacularly miscellaneous Bill, ranging as it does from Devon and Cornwall through the north of England to Zimbabwe and indeed, on to the functions of the Crown Estate Commissioners in the Isle of Man. Perhaps my hon. Friend the Member for Keighley (Mr. Cryer), before he leaves the Chamber, will bear in mind the possibility of moving an appropriate amendment to the Bill in Committee, as I have no doubt that, having spoken on Second Reading, he is likely to be appointed to the Committee that will deal with the Bill. Such an amendment would have the effect that he has so eloquently suggested. I am sure that he can rely on the support of many hon. Members on the Opposition Benches.
I shall refer briefly to only three clauses in the Bill, starting appropriately with clause 1, which deals with the Development Commission. The Development Commission will replace the Development Commissioners, with the power to develop rural areas of England. It is of some concern to me that the writ of the new commission will not run in Scotland.
I understand that the Development Commissioners had power to undertake some promotional activities in the rural areas of Scotland. This is particularly relevant in the south of Scotland, which is not covered by the Highlands and Islands Development Board. I suspect that my hon. Friend the Member for Edinburgh, Central (Mr. Cook) is about to shoot me down in flames for making such a suggestion.

Mr. Cook: Never.

Mr. Home Robertson: It would be more appropriate if the Scottish Development Agency were to have overall power. In effect it has that power, but it has relatively limited funds and it has to reserve its funds for the disaster areas, for the areas with the very highest unemployment, where the Government have achieved the maximum in their endeavours to introduce deindustrialisation in western and central Scotland. The agency has relatively little money available for developing the rural areas of Scotland. I express the hope that the new commission will be successful in its operations in England. I am aware of the needs of many rural areas of England. As the new commission will not be in a position to carry out similar works in Scotland, I hope that the SDA will be given the funds and the encouragement that it requires to carry out the parallel function in deprived rural communities in Scotland.
It is understandable that clause 2 has attracted the most attention during the debate. It is an interesting clause. It refers specifically to the Devon and Cornwall Development Bureau, the North of England Development Council, the North West Industrial Development Association, the Yorkshire and Humberside Development Association and other miscellaneous bodies. There is one bureau, one council, two associations and goodness knows what else.
Many of us have been anxious to learn the nature of the Government's regional strategy. I suppose that it is set out in the Bill. It consists of a miscellany of quangos through which the Government want to operate. My hon. Friend the Member for Jarrow (Mr. Dixon) and others of my hon. Friends with constituencies in the north-east have made it clear that they are dissatisfied with the extent and the scope of the provisions that are before us, and rightly so. I have

more than a passing interest in the north-east, because from my house I look across the river Tweed to the northeast. If I have to live next door to the English, I could not ask for better Englishmen as neighbours than those of the north-east.

Dr. Brian Mawhinney: Put away your fiddle.

Mr. Home Robertson: They are right to be concerned about the parlous economic state of their region. They are right also to be concerned about the disastrous consequences of the deindustrialisation of Tyneside and the high unemployment in the area. I assure hon. Members with constituencies in the area that Scottish Members who have the benefit of the SDA would be more than willing to support them in their endeavours to get a parallel and similar agency for their region, which they need every bit as badly as many parts of Scotland need the SDA.
I recognise that I cannot go very far down the Scottish line while speaking on this Bill. I earnestly wish that we had a directly elected Scottish Assembly to administer the industrial development and other functions of the agency. I look forward to the day when there is a proper and positive regional policy for the regions of England. I applaud the fact that this has been articulated ably by my hon. Friends. We look forward—I fear in vain—for an explanation from the Government of what they regard as a constructive regional development policy. All they have done so far is do away with regional development status in many areas. We have a sort of fire-engine policy of setting up gimmicks such as enterprise zones, which do not appear to be an outrageous success.
Clause 5 was referred to by my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson). It deals with the powers of the Crown Estate Commissioners. My hon. Friend quoted from the Crown Estate Act 1961 and explained the problems that had arisen for some of his constituents as a result of the way in which the Crown Estate Commissioners exercise their powers in leasing property. The Bill will extend from 100 to 150 years their power to grant leases. I was disturbed to hear how that operates in an urban part of England.
The Crown Estate Act 1961 is interesting. It refers to Windsor great park, Regents park and various properties in London and other parts of the country. The House may be interested to know that the commissioners' writ also runs under water. They own the sea bed within three miles of our territorial waters. Anything that is moored or attached to the sea bed, anyone who wants to prospect for gravel or aggregates within that area or anyone who wants to start a fish farm in a sea loch may have to get a lease from the Crown Estate Commissioners.
The subject has recently come to my attention because of a licence that was granted by the commissioners to a company based in Kent to prospect for marine aggregates off the coast of my constituency. Indeed, it does not simply apply to the coast off my constituency. It covers almost the entire east coast of Scotland, for several miles off shore, including the whole of the Firth of Forth and the Firth of Tay from a point north of Stonehaven in Kincardineshire to a point off St. Abbs head in my constituency. It covers 300 square miles.
There has been no consultation with anybody. It is hardly surprising that the granting of this licence has caused some anxiety among the fishing community.
People who have made a living for many years from fishing for shellfish, lobsters, crabs, prawns and white fish could be considerably harmed if a company goes dredging in those waters. Nobody has consulted them about whether the licence should be granted. The development is not subject to planning control, as the commissioners have the power to issue a licence and, in due course, to grant a lease for 150 years if the Bill is passed.
I understand that there have been similar problems on the west coast of Scotland, where, in the deprived rural communities to which my hon. Friend the Member for Keighley referred people wanted to build up small businesses and employ one or two people in fish farming enterprises in sea lochs. What do we find? The Crown Estate Commissioners, without asking anyone, have in some cases sold the right to carry out fish farming operations to undisclosed persons. Goodness knows who they may be. There is no register of who has been granted leases. The commissioners have not sought permission from anybody. Nobody has been consulted and nobody can do anything about it. Therefore, some potentially useful developments have been inhibited.
Rather than extend the powers of the Crown Estate Commissioners to grant leases, we should amend section 5(1) of the 1961 Act and look for ways in which to subject such developments to the normal planning controls. At the very least there should be a publicly accessible register of who owns the rights to and holds the leases of the sea beds in the areas to which I have referred.
This is quite the most miscellaneous Bill that I have come across, and I have seen one or two miscellaneous provisions Bills. There is scope to talk about many issues, but I do not wish to delay the House. I hope that the Minister will reply to some of the constructive points that have been raised in the debate.

Mr. Austin Mitchell: I shall concentrate on clause 2, particularly as it relates to the Yorkshire and Humberside development association, which covers Grimsby, and so is of interest to me. There is no doubt that bodies such as the Yorkshire and Humberside development association do a good job. That is because they are the only bodies available, because of the Government's folly in destroying regional policy, to promote the English regions. In doing that job, they are in an extremely difficult situation, first because they have to compete for development with organisations such as the Scottish and Welsh Development Agencies which have more clout in the sense that they can offer a more complete package of services and can go out with a more vigorous recruitment drive. More important, they have far more money at their disposal. The second inadequacy is the financial limitation in the grants that the Government make available.
An answer from the Minister of State, Department of Industry on 19 January 1983 specifies that the North-Eastern development council will get a grant in 1983–84 of up to £850,000. That is the option two grant in which the conditions for local authority participation will be relaxed, subject to review, because the Minister wants to see how effective the co-operation promised by the local authorities will be. The important point is that he is not offering the other three organisations, including Yorkshire and Humberside, the same substantial increase in grant,

nor is he offering them any relaxation of the pound for pound matching requirement, presumably to keep up the pressure on local authorities to participate in this fashion, which is all very well, but the sums produced by that technique are small.
Given the scale of the problem in those areas, particularly Yorkshire and Humberside, the sums are puny. In 1983–84, compared to up to £850,000 for the north-east, Yorkshire and Humberside will get only £163,000 to deal with an enormous area with enormous problems. That is an important point. Let us compare the unemployment figures of January 1979 with the current unemployment figures and the real or de-Tebbitised figures. In the north-east the figure for January 1979 was 112,000 while in Yorkshire and Humberside it was 115,000, which is roughly comparable. However, there is a difference in the most recent figures. I am talking about the de-Tebbitised figures, in other words the unemployment figures as they were before the recent attempt to fiddle the figures. Unemployment in the northern region is 235,000, which is an increase of 110 per cent., but in Yorkshire and Humberside, which gets a minute grant compared with the north-east, the figure is 303,000, an increase of 162 per cent.
In the face of an increase of 162 per cent. compared with 110 per cent. in an area that gets a better grant, there is clearly a need for more generous provision for the Yorkshire and Humberside development association specifically. It definitely needs an option two provision. It needs a relaxation of the conditions of participation for local authorities. Most of all, it needs, simply and straightforwardly, more money to do a job that is becoming increasingly important.
There are other points to make on the association and the relevant authorities as quoted in the Bill. It brings up the whole problem of regional planning. The English regions have never developed an effective framework for regional planning. Indeed, the framework was enormously weakened by the abolition of the regional employment premium, which was the most effective and sensible means to bring money to bear directly on the key problem—the creation of jobs in the regions. That is what the basis of regional planning is all about.
Given the fact that we have never effectively solved the problem or built an effective framework, the only way to go is forward to regional government, each region having its own development agency and each applying local and national money in combination. We need to set the regions free of the leading strings of central Government. They need to get out and attract the industries that they want in the way that they want them, providing the financial support which best fits that region's plans and which is the best inducement for the industries.
In passing, I am glad to welcome wholeheartedly the framework for regional planning proposed by my right hon. Friends on the Front bench for the consideration of the Labour party for its next election policy. This Government are extremely unlikely to develop the framework of regional planning, much as they need to. They have been loth to move in that direction. They have cut by 25 per cent. the financial provision.
So the Government's only regional policy is really a policy for the south-east, disguised as a policy for the whole country. Because of the policy of survival of the fittest and the fattest, development, such as it is, will concentrate on the south-east, an area that has always been


pampered and has drained the life away from regions like mine and others further north—the deprived and declining regions which suffer from the growth not only of the great wen but of the whole prosperous south-east. That essentially is the Government's regional policy: let the south-east go ahead, in so far as any region can in face of their economic policy, and let it drain the life from the rest at an even faster rate than it has been doing.
We are seeing increasingly intense competition in attracting industry, which is the important factor for regional policy. The amount of foot-loose industry available for attraction by bodies like the Yorkshire and Humberside development association is minute. We are involved not only in intense competition within the country with bodies like the Scottish and Welsh Development Agencies, which have superior clout. We are also involved in increasingly intense international competition. The regional organisations need to get out and compete internationally for the industries that they want.
Yorkshire and Humberside faces another problem. The inducements that it can offer, because of the vagaries of development policy, are in some respects less attractive than those of other parts of the country. Our instance, perhaps the most striking to the people in Grimsby, is the decision of Findus to establish a new fish processing plant in Newcastle, away from the centre of the industry and the focus on Humberside—in the Grimsby college of technology there is the food technology build-up associated with the industry—and away from the main landing port and market, which is Grimsby. It was lured to Newcastle by the fact that the area could offer superior incentives. That is why each area must be able to frame its inducements, attractions, subsidies and support in its own way to develop the kind of industrial nucleus that it needs. That flexibility is essential.
Considering regional policy in a wider sphere, the multiplicity and complexity of institutions to help and encourage the regions often dazzle local government officials. They include English Industrial Estates, the four bodies with which we are dealing today, including the Yorkshire and Humberside Development Association, as well as the Invest in Britain Bureau, the British Technology Group, në NEB, BSC Industry and the European Coal and Steel Community Fund. There are also the enterprise zones, although they are essentially just a means of trying to distract attention from the gravity of the problem by moving furniture around as vigorously as possible. That is the essence of the Government's economic policy. There, are also the local authorities able to offer a 2p rate.
In the document "European Regional Incentives 1982", for a copy of which I am grateful to my hon. Friend the Member for Workington (Mr. Campbell-Savours), the section on Great Britain and Northern Ireland is the longest, due to the complexity of the structures that we have developed. The same document shows that the French not only offer a more sophisticated and, in many ways, more attractive matrix of regional incentives, as the Timex experience shows, but industrialists taking advantage of the grants and benefits are tied to the targets to which they pledge themselves, and to enforce this there is an effective clawback of regional grant of up to 10 per cent. of the total available in any one year.

Mr. Campbell-Savours: Does my hon. Friend agree that if the European Community functioned properly it would have ensured that the arrangements were common to all member countries and that there were not such massive differences between one area and another that companies such as the one in Dundee could shift resources and investment from one part of the Community to another?

Mr. Mitchell: My hon. Friend is quite right. Moreover, the reason why the British Labour party and the British people reject the European Community is that it has never developed in ways that would favour this country. It has developed basically as an agriculture protection society—two-thirds of its expenditure is on agriculture—because that suits the needs especially of French but also of German agriculture. It has developed as an industrial free trade organisation because hat suits the needs of Germany, but it has never developed an effective common energy policy, which is what we want because we are energy rich, or an effective regional policy which we need because we face a more acute problem than most other EC countries in terms of regional disparities and regional decline associated with the decline of older basic industries. Until it develops those two policies it will never suit the needs of this country.
The structures with which we are dealing today are less than adequate, as I shall illustrate from my constituency. A body such as the Yorkshire and Humberside development association covers an enormous area which often has little in common with the needs of an area such as Grimsby, which has a very strong local pride, partly the result of isolation, and whose needs and aspirations are limited to the south bank of the Humber, which has been almost tacked on to the Yorkshire and Humberside unit simply because there was nowhere else on the chess board to put it. If we are to develop local pride and involvement and to mobilise the strong local feelings that still exist in Grimsby, though they have disappeared from other parts of the country, we need more local development agencies such as those that the Bill allows the Minister to support—bodies
whose principal object appears to the Secretary of State to be the promotion of industrial and commercial development in any area in England.
That kind of body, if more limited in area and scope, is needed in Grimsby. We are linked to the north bank by the Humber bridge. However, in fishing, Grimsby and Hull have always been competitors. There is also intense competition for a limited supply of available footloose industry. The problems of Grimsby are the kernel of the problems associated with regional development. An approach on the basis of bigger and wider areas means that it is difficult to meet the specific needs of Grimsby. There is need for more immediate authorities having closer contact with the areas they serve.
Under the Government, unemployment in Grimsby has become extremely serious. It is part of a national crisis. In many respects, we are witnessing the strange death of industrial Britain. The policies of deflation, high interest rates and the deliberate use of depression as a means of disciplining the working class and breaking the power of the trade unions have hit Grimsby especially hard.
Our decline has been the steepest of any country in the advanced industrial world. Whatever the steps taken by the Secretary of State for Employment to conceal the disaster, the real figure of unemployed is between 4 million and 5


million. With the highest fall of industrial production, especially in manufacturing industry, in the advanced industrial world, our depression is the most severe.
It is no use arguing that, phoenix-like from the ashes, there will arise new industry—real jobs, as the Prime Minister has described them—and a dynamic economy, because growth tends to beget growth and decline to beget only decline. We are locked into a spiral of decline that hits particularly an area such as Grimsby—all for the sake of a policy that cannot work. We had a male unemployment rate in Grimsby in May 1979 of 8 per cent.—the overall figure was 6 per cent. That has now become, in January 1983, a rate of 20 per cent.
Grimsby is a hard-working town. It has always been concerned to get on with the job. It possesses a high level of skills and a high degree of involvement in work. Now, in a town that was proud of its traditions, the policies of the Government mean that one man in five is unemployed. That is a horrendous achievement. What is more, the overall unemployment rate is 15 per cent. The vacancies for every 100 unemployed, which in May 1979 were 19, are now 0·97. There is an increase in unemployment of 150 per cent. That is a tragedy, not only for young people but for older men who are strong of arm and back but for whom there is no industrial future.
It has all been so pointless and unnecessary. We are running the economy for money, not for people. It is like Goldsmith's "The Deserted Village". The same can be said of the deserted aluminium plant, the deserted fish dock, the deserted steel plant and the closed down coal mine:
Ill fares the land, to hast'ning ills a prey,
Where wealth accumulates, and men decay.
That is what is happening all over the country, for no reason.
It is heartbreaking especially for a place such as Grimsby, because the essence of regional policy in Grimsby as operated by the local authority has been a consistent, wise and far-sighted attempt since the war to diversify away from the staple, basic industry of fishing into new industries to bring new life to the area and prevent disastrous consequences ensuing from any decline in fishing. After the war, the Grimsby council developed sites on the Humber bank and elsewhere to attract new industries and diversify what had been almost exclusively a fishing port in the period up to the war. That made Grimsby a very diverse industrial society.
The impact of this Government's policies and the failure to redress them by effective regional policies is that that diversification has been steadily and, in the last two years rapidly, undermined. We have seen one of the new industries, Laporte, shedding 330 people in 1980 and 500 people in 1981. We have seen the extremely efficient and competitive Courtaulds plant, employing more than 2,000 people, now reduced to a little over 1,100. We have seen the same pattern of redundancies at Norsk Hydro, Fisons as it was, 240; and at Lloyd Cars, which produced parts for Rolls-Royce, 25. We have seen the slimming-down of the food processing plants: Birdseye, Findus, and the closing down of the Ross No. 1 plant for processing fish. We have seen a long and tragic decline, undermining the wise and far-sighted efforts that the council put into trying to develop the area.
From the point of view of each firm it is not difficult to understand what is happening. To survive, each firm has to make itself more efficient and has to shed labour. That is the state into which the Government's policies have plunged them. There is no alternative for firms but to shed people to survive. The problem is that no one is taking any control or oversight of the overall position. No one is responsible for the jobs and the futures of the people who are shed in this way because no one is developing the new industries and bringing in the new jobs. No one is taking effective control or oversight of the regional consequences of the decline.
Each of the persons shed, for valid reasons, by each firm, costs £5,000 in terms of taxes no longer paid, benefits received and production no longer achieved. It is a crippling cost. It is interesting that people such as Baker and Eltis, who talked about the burden of Government spending and the so called non-productive sector in the mid-1970s, are not talking now about the burden of all those unemployed people on a shrinking productive base. Everything that has been done in that area has been rapidly undermined. Yet, at the same time, the original base—the fishing industry—from which the council tried to diversify in the post-war period, is itself now in decline because of the loss of distant water fishing. It is wholly uncertain about its position. It is no longer possible for firms to continue as they are not producing enough profits. The market prices are not high enough and the catches are not large enough to produce profits to invest in modernising the ageing fleet.
The fishing industry in Grimsby is of a crucial size. It is too small for the scale of facilities, the dock charges, the labour charges, the slipways and the engineering that it must support. The industry is rather like a house of cards. Recently it lost two firms—one in Grimsby and one in Hull. It faces the loss of vessels either through other firms going bankrupt or through vessels deciding to transfer elsewhere. The house of cards is threatened and becomes more precarious. It is impossible for the remaining vessels to carry the burden of charges that press down on the industry. So the base of the structure of diversification—fishing itself—is now threatened.
Industry in Grimsby, like industry throughout the nation, is leaner, trimmer, more competitive and more productive. But it has nothing to stimulate it, nothing to produce for, no incentives and no great drive. That is because the Government obstinately refuse to do the only thing that can now give British industry the go ahead, which is to expand the economy to provide a sense of buoyancy, expansion and an ability to increase and find demands for output to support and to increase profits and investment.
Grimsby is an area with peculiar problems. It has a strong local focus, to which the existing large institutions can offer little. If Grimsby is to develop and recreate that spirit of local incentive and an awareness of the development needs of the area, which it had in the postwar period, it must have a development institution with a more local focus that can attend to the needs of that unique area. Grimsby and South Humberside need more realistic units for development and incentive. Instead, we find a multiplicity of institutions. There is the story of Aneurin Bevan pursuing power from the parish council—when he found that it was not there—to the county council to find that it had moved on to Westminster, only to find that it


had gone from this Chamber. In the same way, any local organisation pursuing development must do so throughout the country because there are so many institutions.
Grimsby wants development. It wants to attract new industry. To get it it must, first, approach the EC and plead that it has special needs and a special claim to help because it is dependent on fishing and the treaty of Rome pledged to develop not only agriculture, but fishing. Fishing has had a cruel fate, while agriculture has had a rich and prosperous fate. A community that depends on fishing has a claim to development. It could turn to the social fund. It could turn, as we are doing, to a regional study of the needs of Hull and Grimsby together. It could turn to the national Government. It could turn to the Department of Industry and ask for help under the Industry Act. It gets help through regional policy. It gets help through the Yorkshire and Humberside development association. If we are to attract a factory such as Nissan—we hope to do that, because we are the best site that is available—it will be through the blandishments and the efforts put in by the Yorkshire and Humberside development association and the county council.
We can turn to other Government Departments for specific help for the fishing industry. For that we can also turn to the British Transport Docks Board. We have to turn to the Ministry of Agriculture, Fisheries and Food for aid, and to the Common Market for restructing the policy on fish.
The sources of such help are scattered, numerous and confusing for a local authority that has wide responsibilities and for which the task of attracting industry is a tremendous burden. There is a multiplicity of help for local government, but it is often difficult to get. Grimsby is applying for inner urban aid to tackle the problems in the centre of the town, where the social problems are as acute as they are in many of the big city centre areas. Because Grimsby's area is more localised, it finds it more difficult to produce the statistics for aid or to show the scale of the problems. The contrast between the poorer parts and the richer parts of Grimsby is as stark as in many other cities. The need may be more difficult to prove, but it is as great.
We also turn to central Government for help in the Pyewipe reclamation scheme. We are running short of land for industrial development, and there is the possibility of reclaiming up to 1,000 acres. That reclamation will be valuable for the whole region, but it is beyond the resources of a local authority such as Grimsby. It needs wider planning and wider participation.
We want help from central Government for MSC grants and for training facilities. We need the help of Associated British Ports in releasing land from the docks for development in Grimsby.
I have catalogued the directions in which a town such as Grimsby, anxious to build its future and control its own destiny, has to turn. The same is true all over the country. There is a confusing complexity of authorities to which towns that are proud of their area have to turn for help. That multiplicity is beyond the resources of small towns to cope with, but wider bodies such as the Yorkshire and Humberside development association are directly relevant to it.
The result of the inadequacy of regional policy in a time of economic decline, as under this Government is the

generation, not only of despair in a place like Grimsby, but of a feeling of inadequacy, even impotence, in coping with the problems that the town desperately wants to solve.
The result of regional policy here, as in so many other places, is not to develp the regions but to generate in those regions a begging-bowl mentality in which the trains to London are full of deputations and delegations going to different Government Departments for different forms of help rather than having the organisations and the framework through which they can help themselves. That is a particularly tragic weakness for a town such as Grimsby which had such a proud tradition of developing its area and which wants to fight back. It does not want to sit down and suffer the kind of decline that is happening. Local pride wants to encourage new industry to the area but does not have the facilities through which to do so.
Regional policy should set areas such as Grimsby free to help themselves. The Bill is inadequate because it does not do that. It does not provide Government backing to areas to help themselves. It does not set them free to build up their strength. That is a particularly tragic gap in the face of all that the Government have done to British industry, to areas such as Grimsby and to the declining parts of Britain. In the light of that, the Government should at least have had the sense of responsibility and the sensitivity to provide areas with the framework, strength and financial backing to fight back and rebuild destinies which the Government have ruined.

Mr. Wakeham: This was a wide-ranging debate even before the hon. Member for Grimsby (Mr. Mitchell) made his speech, and I make no complaint about that. The Bill is about a rather narrow range of subjects. It makes changes in the law applicable to several aspects of public expenditure and financial management. What it does not do is to make any significant change in the levels of public expenditure.

Mr. Cowans: That is the trouble.

Mr. Wakeham: There is a considerable degree of agreement about the principle and there is substantial disagreement about the levels of public expenditure. I understand that. However, that is not what the Bill is about. We shall have substantial debates on the public expenditure White paper in the near future. [interruption.] No doubt the Opposition Chief Whip will assist if extra days are required. We shall also have a Budget introduced by my right hon. and learned Friend the Chancellor of the Exchequer, and there will be a debate on the Finance Bill, which will cover many of the subjects dealt with this evening.
I shall do my best to answer many of the points that have been raised. The hon. Member for Edinburgh, Central (Mr. Cook) welcomed the Bill and said that it would have the Opposition's support, subject to the many points that he raised. I am grateful to him for that. He raised several matters, one about Zimbabwe and the two out of the five loans which he identified which are not written off in clause 3. The other two loans were made by the International Bank for Reconstruction and Development to the Central African Power Corporation.
When the Rhodesian Government failed to service those loans, the Government honoured the guarantees and paid the International Bank for Reconstruction and


Development. However, during the period of UDI the Central African Power Corporation paid the interest on the loans into a non-interest bearing blocked account with the Reserve Bank of Zimbabwe. From May 1980 the money was invested in Zimbabwe Treasury bills, so it was available when the independence settlement was reached and it was agreed that Her Majesty's Government should be repaid. After a period of two years' grace from 1980 the repayments were rescheduled over a period of eight years at an interest rate of 8 per cent. payable on the amounts outstanding from the time of the settlement. To date, we have received £9 million.
The hon. Member for Edinburgh, Central said that the Treasury guarantees should not be treated as public expenditure. I understand that they are not so treated, except when the guarantee is called and that guarantee falls outside the public expenditure. In the normal run of things, the guarantees do not form part of public expenditure. As the hon. Gentleman will know, discussions are taking place between the Public Accounts Committee and the Government on that matter. I understand that the PAC has put forward a contrary view. The Government will reply to its observations, but at present, if Treasury guarantees are not called—that is, if the liability is not called—they do not form part of public expenditure.
The hon. Gentleman also mentioned the annuities and cast doubt on whether they should not have been dealt with long ago. The Labour party has had since 1973, when the original arrangements were made, to do something about them. It has had a reasonable period in government—many of us might think rather too long—and probably had a chance to deal with them. However, the Government have introduced a Bill to deal with that matter.
The 10 per cent. cut in manpower at COSIRA was part of a general drive to improve efficiency in Government and quasi-governmental organisations. COSIRA was able to find the 10 per cent. savings from its central administration and has also been able to redeploy some staff in the field. Therefore, it is both the organisation's and the Government's view that COSIRA is now more effective as a result of the savings.

Mr. Cook: The Minister said that the reduction was part of a general drive for manpower savings. Can he be more specific? Is he really saying that COSIRA came forward and said that it could achieve a 10 per cent. saving, or was that suspiciously round figure sent to COSIRA as its target?

Mr. Wakeham: I have no doubt that agreement on the figure was reached after negotiations. It is in the nature of such things that at the beginning of such negotiations there may be some differences. However, I have no details of the negotiations, although I congratulate COSIRA on its achievement in reducing central costs and thus making itself more effective. That is to its credit.
I think that all hon. Members have welcomed clause 7. The hon. Member for Newcastle upon Tyne, Central (Mr. Cowans), who made an interesting speech, claimed more credit than most for it. I do not complain about that. The Government are not even denying that he is entitled to his share of the credit, but we have introduced the clause and I am glad that it has been welcomed by the House.
The Bill is not about regional policy as such. Clause 2 is about regional development organisations. Hon. Members have expressed concern about the effectiveness of regional policy, just as the Government have. Our main aim is to concentrate on the areas most in need.
The Government are reviewing the effectiveness of regional policy. As the Prime Minister told the hon. Member for Easington (Mr. Dormand) recently, the purpose of the review of regional policy is to see how we can best help effectively and in the longer run to build industries that will have a future. We are aware that some industries that went to the regions—I suppose that Linwood is a classic example—did not have a future.
We have concentrated our help on the special development areas and we shall continue to do that. When the review of regional policy is complete, appropriate announcements will be made.
The hon. Member for Newcastle upon Tyne, Central and others asked about clause 2. The main purpose of the clause is to regularise payments to existing bodies. We think it right to provide for other similar bodies to be supported in the same way, for the benefit of other regions in the future. There is no commitment at this stage to do that, but we thought it right to include the principle in the Bill.

Mr. Campbell-Savours: Is it possible to talk of extending the provision when the part of the Bill dealing with public sector manpower says that it will have no material effect on public expenditure? That and what the Minister says cannot both be correct, unless the Minister is misleading the House.

Mr. Wakeham: I am certainly not misleading the House. The Bill sets the framework for future arrangements. The financial arrangements for any future organisations will be made, not under the Bill, but by way of Votes on the appropriate Department. The Bill makes it possible for the Government to set up additional bodies if they are needed.

Mr. Cowans: Clause 2(2)(e) makes that possible, but it does not say what qualifications are needed for the Treasury to pay out the money. It does not say whether social need will be taken into account. If the Treasury is to pay out, it must have some qualifications. What are they?

Mr. Wakeham: We are talking about organisations to promote development in a region. We are talking, not about organisation or payment, but about promotion. Negotiations with the local people concerned will have taken place and the organisation will have to be such that it can promote the region effectively. Each suggestion will be treated separately. Each area that comes up with proposals will be considered sympathetically. We are anxious for the regions to be promoted. I cannot go further than that, because whether a body is set up will depend on the region and the Government.

Mr. Cowans: Surely, under clause 2(2)(e), anyone may apply to promote a region, because no qualifications are set out. The Secretary of State will have to decide. Would it not be more fruitful to set out the qualifications? Would it not make sense to specify social need as a priority? If Uncle Tom Cobbleigh and everyone else applies, it will make nonsense of any regional policy that the Government have, if they do in fact have one.

Mr. Wakeham: The hon. Gentleman is still confusing regional policy with a regional development organisation. The Bill deals with a body to promote the region in other parts of the world and so on. The Government's regional policy is under review and will at the right time be announced, but it is no part of the Bill to deal with it.
The regional development organisations, the sums of money available and the division of those sums between the organisations are not strictly within the province of the Bill. The Bill is about the principle of making these grants. That principle is not in dispute. My hon. Friend the Minister of State, Department of Industry, in his written answer of 19 January, set out quite firmly the reasons behind the allocation of grants to each of the four regional development organisations.

Mr. Dixon: I specifically referred to the south Tyneside industrial fair, which was promoting something to attract industry to an area of high unemployment. Will the Minister say whether that would come under clause 2(2)(e)?

Mr. Wakeham: It is not a matter for me, but I would say almost certainly not, because a northern regional development organisation covers that region. It is that organisation which deals with that area. Clause 2(2)(e) deals with providing regional organisations in those parts of the country that do not have them.

Mr. Campbell-Savours: I thank the Minister for giving way, but clause 2(2)(e) does not say that. It does not say "either, or". Clause 2(2)(e) is not presented as an alternative. It appears to us to be additional. In no way can it be said that clause 2(2)(e) precludes the right of any organisation within the northern region or any other part of the country that wishes to do so to promote
industrial or commercial development".
Will the Minister come clean at the Dispatch Box and tell us what we want to know? Can our individual industrial development promotional units, on the basis of clause 2(2) (e), go to the Government and be provided with additional money under a separate heading in another Bill? That is all we want to know.

Mr. Wakeham: The hon. Gentleman is asking questions the answers to which are not in the Bill. Of course, there is nothing to stop any organisation from going to the Government and asking for money. No Bill of which I am aware has been passed to do that. Whether an organisation would be successful would depend upon negotiating something with my hon. Friend the Minister of State. We are speaking in theory. I am saying that my hon. Friend is not likely to agree to a regional development organisation that will undercut the existing ones, some of which are doing extremely well. It is not the best way to promote a region to have two competing regional organisations in this fashion.

Mr. Cryer: The Bill does not refer to any regional body. It refers to
any other body, whether corporate or unincorporate, whose principal object appears to the Secretary of State to be the promotion of industrial or commercial development in an area in England.
The word "area" is not defined. It could be a region, a town or a county council area. It is available to the Secretary of State to use his discretion to decide whether to make grants to a town association or a county council association. It does not necessarily have to be a region.

Mr. Wakeham: I was not saying that it was. I was giving my understanding of how my hon. Friend would use the clause. I am not saying that it is not possible for him to use the clause to introduce two competing regional organisations in, for example, the northern region. I am saying that in my view my hon. Friend's likely decision is that that would not be the most effective and efficient way of using such organisations. If the hon. Gentleman thinks that there is a case to be made for using two competing organisations, or if his hon. Friends take that view, it is up to him or his hon. Friends to advance the argument to my hon. Friend.
A number of questions have been raised about the North West Industrial Development Association. The complaint of the right hon. Member for Manchester, Openshaw (Mr. Morris), who courteously told me that he had to lease the Chamber, is that there is a lack of co-ordination and other related difficulties. The right hon. Gentleman is to see my hon. Friend later this week to discuss these issues. It would be inappropriate for me to deal with details that will be discussed at the meeting. The matters which the right hon. Gentleman raised are exactly the same sort of items which my hon. Friend mentioned in his report to Parliament on 19 January. I have no doubt that there is every likelihood of a useful and constructive meeting later this week.

Mr. Cook: I am glad to hear that my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris) is to have a useful and constructive meeting later this week. I am sure that he will welcome that assurance. The difficulty arises from the wide terms of the Bill. The clauses provides that
That Secretary of State may
impose
such conditions as he may … think fit.
One of the conditions that he has imposed for three of the organisations is that local authorities must match Government grant pound for pound. NWIDA applied to be treated in accordance with the more generous formula applying to the North East Development Council. It believes that it met the same test that was set for the development council. If the Minister wants the Opposition to accept the clause—obviously we shall return to it in some detail in Committee—with such a wide and sweeping power for the Secretary of State, he must give a more convincing explanation to the House and the Committee than his hon. Friend gave when he made his statement on 19 January.

Mr. Wakeham: It would not be appropriate for me to add to my response other than to say that it seems that the complaints of the right hon. Member for Openshaw covered the same areas that my hon. Friend mentioned in his statement. My hon. Friend said:
I have not … been able to satisfy myself that the requisite degree of commitment to a filly and effectively co-ordinated regional programme by all the local authorities and new towns in the north west has … been demonstrated."—[Official Report, 19 January 1983; Vol. 35, c. 145.]
That is the sort of issue that can be best handled at a sensible discussion with my hon. Friend and not in debate on the Floor of the House tonight.
The hon. Member for Sheffield, Hooley (Mr. Heeley) expressed concern about Zimbabwe and the development there. The aid to Zimbabwe made or pledged by the Government amounts to about £113 million, plus £15 million guarantee on export credits. My right hon. Friend the Member for Aylesbury, (Mr. Raison), the Minister for


Overseas Development, was in Zimbabwe earlier this month. He pledged an additional £20 million. There will be £15 million of export credits and £5 million of additional aid.
The hon. Member for Holborn and St. Pancras, South (Mr. Dobson) referred to Crown Estate property. I am in no position to answer his detailed questions. The Bill extends leases to 150 years, which, as I said, is an important means by which the commercial property of the Crown Estate can be dealt with. No doubt the hon. Gentleman will pursue what he said. I have no idea of the detail or scale of what the hon. Gentleman said, but what he said was of little comfort to me.
The Crown Estate leases set out the rights and obligations of the lessees. The Crown Estate Commissioners are bound by the Rent Acts. The commissioners can intervene only if there is a breach of the lease. I have every reason to believe that the Crown Estate conducts its affairs properly and deals with problems that are brought to its notice when obligations that it has power to deal with have been broken.

Mr. Home Robertson: I have just noticed that clause 5 extends to the Isle of Man. I have not noticed a Bill in this Parliament that extends there. I realise that the Minister cannot reply off the top of his head, but will he give us some idea whether there are any precedents in this Parliament of Bills extending to the Isle of Man? Is that not normally the function of the House of Keys?

Mr. Wakeham: I have no idea whether other Bills have extended to the Isle of Man. I am sure that this one does.

Mr. Home Robertson: Will the Minister tell us?

Mr. Wakeham: I shall write to the hon. Gentleman, with the greatest of pleasure. I was about to answer the other points that he raised. He asked about the Development Commission in Scotland. The Scottish Development Agency and the Highlands and Islands Development Board took over the Development Commission's functions in 1975 and 1976. Most hon. Members who I have heard discuss these matters believe that the Scottish Development Agency does not do too badly. Most of the complaints seem to be on the other footing.
I have done my best to answer the points that have been raised. Some of them went wide of the Bill's main provisions. I do not complain about that. There is general agreement that the Bill does several useful things, and I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Orders of the Day — MISCELLANEOUS FINANCIAL PROVISIONS [MONEY]

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act of the present Session to establish a Development Commission in place of the Commissioners appointed under the Development and Road Improvement Funds Act 1909, to authorise the making of grants by the Secretary of State to bodies promoting industrial or commercial development in areas in England, to extinguish liability in respect of certain guarantees given under the Colonial Loans Act 1949, to amend certain enactments authorising the Treasury to give guarantees, to extend the power of the Crown Estates Commissioners to grant leases, to make provision for the redemption of certain annuities and allowances which have been payable out of public funds since before 1874, and to amend section 173A of the Local Government Act 1972, it is expedient to authorize—

(1) the payment out of money provided by Parliament of sums required to enable the Secretary of State to make grants—

(a) the Development Commission, and
(b) bodies promoting industrial or commercial development in areas in England;

(2) the extinguishing of liability to make payments in consequence of the fulfilment of guarantees given under the Colonial Loans Act 1949 in respect of certain loans made to the Colony of Southern Rhodesia and the Federation of Rhodesia and Nyasaland;
(3) The payment out of the Consolidated Fund of —

(a) any sums paid in redemption of certain payments charged on the Consolidated Fund or payable out of money provided by Parliament; and
(b) any increase in sums payable out of that Fund which is attributable to any provision of the said Act of the present Session extending the power of the Treasury to give guarantees under any other Act;

(4) the payment of any sums into the Consolidated Fund.—[Mr. Mather.]

Orders of the Day — ENERGY [MONEY] (NO. 2)

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act of the present Session to amend the law relating to electricity so as to facilitate the generation and supply of electricity by persons other than Electricity Boards, and for certain other purposes; and to amemd the law relating to duties of persons responsible for nuclear installations and to compensation for breach of those duties, it is expendient to authorise the payment out of money provided by Parliament of any sums required by the Secretary of State for making payments to or in respect of the Electricity Consumers' Council established by the said Act of the present Session or to or in respect of the chairman of the Council.—[Mr. Mather.]

Orders of the Day — Industry and Housing (Walsall)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mather.]

Mr. Bruce George: We have dealt with the Ginns and Gutteridge Leicester (Crematorium) Bill. I trust that Hansard will subtitle this debate the Walsall industrial graveyard debate. That is the situation in the constituency that I have been proud to represent since February 1974. Both the Minister and I were part of that intake. The Minister's role in the House of Commons football team has been to prevent adversaries from shooting the ball past me into the net, a task in which he rarely succeeded. I regret that on this occasion his chances of stopping the balls flying past him into the net will be even more remote.
The plight into which my constituency has been plunged is no game. It is deadly serious because a town with a history stretching back to medieval times is in a crisis, much of which is the Government's making. I am not a dogmatist who seeks to pin all the blame on the Government, but it is dogmatic for the Government to put the blame on virtually everyone else for the current state of our economy and my constituency. Apparently the fault lies with the recession, the Government's inheritance, obstreperous trade unionists, Arabs, Japanese, and Spaniards—almost anyone except the Prime Minister, the Chancellor of the Exchequer, the Secretary of State for Employment, the Secretary of State for Industry and the rest of the Cabinet.
I had the honour of saying the last words in the last Parliament. My hon. Friend the Member for Greenwich (Mr. Barnett) replied to the debate. In that debate there was hope for my constituency. At that time there was under 6 per cent. unemployment, 6,000 jobs were saved by the temporary employment subsidy, £20 million was allocated to council housing and £17 million was allocated via the Housing Corporation. Over a few years no industrial development certificate had been refused for Walsall since 1974, and there was a housing programme to meet the town's needs. Now, three and a half years after the dawn of the new age—a dark blue age—what a different situation my constituency is in. The position is desperate. What was a difficult situation is now acute. What was unemployment is now mass unemployment. The roll call of dead companies is terrifyingly long, and growing. Unemployment is now nearly 20 per cent. even according to the Government's doctored figures. In reality one in four people are out of work. I am sure that the makers of graph paper must be enjoying a boom as the graphs are now covering more than one sheet of the paper, such is their steepness.
Many companies are hanging on by their fingertips. I visited one enterprise in my constituency last Friday. The proprietor told me: "We are talking about survival. We cannot suffer losses indefinitely."
I shall take just one part of my constituency, the township of Darlaston, which has seen the demise of some of its former industrial giants, such as Rubery Owen, GKN, Charles Richards and Eaton Axles. Many other major redundancies have been announced. Some companies such as Bradley and Foster, Rubery Owen and

GKN are barely a rump of their former selves. The consequences for the constituency are almost equivalent to the dropping of some form of industrial megaton bomb.
The latest body blow is the near extinction of F. H. Lloyd, the largest steel foundry in Western Europe, making one sixth of steel castings of the United Kingdom. It has been done to death by the Lazard scheme in connivance with the Government, the EC and the owners of the company. Why was it chosen for execution? What part did the Government play? It is ironic that such a catastrophe did not even make the headlines of the local papers. I suppose that catastrophes have been routinised under the Government.
The Lazard scheme is immoral and probably illegal. Shareholders are being bribed to scuttle—to take their 30 pieces of silver and run. F. H. Lloyd has had a lot of Government funds to enable it to modernise—there is the new pattern shop and the new sandplant. That is taxpayers' money. What will happen to that equipment? I understand that under the Lazard scheme it will go under the hammer. It will be physically destroyed. If vandals broke into the factory and destroyed that equipment, they would be jailed, yet Luddism can be practised legitimately at the behest of the Government.
Is the Lazard scheme legal? Is it not in contravention of the treaty of Rome, as I suspect? I shall write to the European Court to see if it is legal and to seek to get it struck out.
The cumulative effect of these closures and redundancies has been to produce bitterness, frustration and a sense of helplessness among every generation. Men of 40 are told that they are too old. I recently visited the Darlaston redundancy action group. It had a profound effect on me to see a large number of men who know that, barring a dramatic development in our economy, they will never work again. There are youngsters for whom full-time employment is a remote possibility. Women and ethnic minorities are suffering disproportionately.
Other parts of Walsall, which may be more oriented to Birmingham, such as Pheasey, are also suffering dramatically and drastically from unemployment in the north Birmingham area. The west midlands was once second only to London and the south-east, with virtually zero unemployment in the 1960s. Now 41 per cent. of the unemployed in our region have been out of work for a year or more. The ratio of unemployment to vacancies is 48·7:1, lower only than Northern Ireland.
At one time Walsall's unemployment was way beneath the regional and national average. Now we are higher than both. We have the worst figures in the West Midlands county council area. Government policy is not creating jobs; it is destroying them.
Why is it, when our unemployment figures are as high as they are, that we are virtually the only west midlands authority which is not part of a Government programme, partnership or designated status authority? We have no enterprise zone. Why was the scheme for Darlaston to be created an enterprise zone slung out by the Government? Enterprise zones are not the solution of industrial problems—far from it. We are desperately trying to attract industry and there has been some success with starter factories, but we are becoming increasingly isolated and hampered in seeking new industry.
A sensible business man, with a choice of locations for setting up premises, will examine the merits of rival locations. Increasingly he will look at the package of


financial aids available. It is a sad fact of life that adjoining areas to Walsall benefit from the powers of the Inner Urban Areas Act and can compete for industry in a way that we in Walsall cannot. We want to be able to compete equally with our neighbours. We do not want to be in a situation, as one person said, of going to the wicket to face a hostile bowler with no bat and pads.
Will we have that equality of status? What assistance will be forthcoming to prevent the haemorrhaging of our economy from becoming fatal? Will the Minister help to infill the large areas of the town that have been undermined by limestone caverns, blighting housing and industry? The Department of the Environment report has been postponed to June? I wonder why? I hope that it will announce for us a considerable assistance in filling in the limestone caverns.
Public finance is used to trigger private sector money through urban development grants. How much money will Walsall get? Are these funds open to non-designated areas?
Going on to housing, Government assistance has not met the needs of the town. Under this Government, housing has taken three quarters of all cuts. Council house building is lower than at any time since the 1914–18 war. No council houses are being built. We need 2,100 units of municipal accommodation, yet none is being constructed. The net increase of the waiting list since 1978 is about 14,000 and no new contracts have been let since 1979. Rents are up 134 per cent. nationally. In Walsall in April 1979 the average gross rent was £9·54 a week; in April 1982 it was £21·50. It is the rent payer who is paying for management, for repairs, for the homeless and for the elderly, because there is no public subsidy to the housing revenue account.
The housing stock of Walsall is deteriorating, as is proven by the recent West Midlands house condition survey—3,500 public sector dwellings are unfit, and more than 6,000 properties require major repairs. People are paying more and more for less and less. Waiting lists are growing longer and many of the elderly who seek appropriate accommodation will probably die before it is made available. With the break-up of marriages and the number of people unable to pay for mortgages joining the queue, the problems are becoming acute and they are not being met.
We need resources to build private and public housing and to save houses from dereliction. The pittance that we are allowed to spend is grossly inadequate. We need a massive building programme to begin very soon, a freeze on all rents for a year, a right to repairs, full protection for direct labour organisations and better protection for private tenants. Tenants should no longer be second class citizens, and proper tenant democracy should be introduced. We want to give authorities the right, if they wish, to take over the property of absentee landlords, and we want to provide new forms of aid for first time house buyers to get the industry moving. It is a tragedy that while so many people in the building industry are out of work hardly any houses are being built in the public or the private sectors.
The Government have failed Walsall, the West Midlands and the nation. Industry has been slimmed down to such an extent that if and when there is a recovery we shall be too weak to capitalise on it. There is no time today, and it is outside the Minister's competence, to talk

about Government policy on public transport and their failure to implement a proper transport policy. Nor is it within the Minister's competence to talk about the recent crisis in our area health authority or about the Government's confrontationist policies in seeking constant fights with organised labour. It is also not the Minister's role to seek to defend the Government's policy of reducing inflation at such a heavy price.
Today is St. Valentine's day. The kiss from the Government to my constituency is the kiss of death, delivered with the same affection as that of a certain infamous Transylvanian and with the same lethal effect of removing blood from a healthy body. I am assured by books on the occult that the way to rid oneself of that demonic influence is a goodly supply of garlic, a wooden cross and a stake. I trust that the cross that will dispose of such pernicious influences will not be a wooden one held at arm's length but, more appropriately, a cross on a ballot paper to consign the Government to the fate that they deserve. They have failed the constituency that I represent. That is not the Minister's fault. I am sure that he is sympathetic to the plight of many people whom I and my hon. Friend the Member for Walsall, North (Mr. Winnick) represent. In fairness, however, I think that he will see and admit that the Government must change their policies because our St. Valentine's day message to the Government must be that the people of Walsall have had enough of unemployment, and if the Government do not create employment they will reap the whirlwind.

Mr. David Winnick: rose—

Mr. Deputy Speaker (Mr. Paul Dean): Order. Does the hon. Gentleman have the permission of the hon. Member for Walsall, South (Mr. George) to intervene?

Mr. George: Yes, Mr. Deputy Speaker.

Mr. Winnick: I am grateful to my hon. Friend the Member for Walsall, South (Mr. George) for allowing me two or three minutes of his time. We both represent the same borough and we are both deeply concerned about the situation there. The Minister may say, as Ministers have said in previous replies, that there was unemployment in Walsall before the Government took office, as indeed there was. What did not exist, however, was mass unemployment and all the problems associated with it. In May 1979 when the Government took office the unemployment rates in 222 travel-to-work areas in the United Kingdom were higher than in the Walsall travel-to-work area. Today, there are just 70 that are higher.
When the Government took office unemployment in the Walsall travel-to-work area was 5·1 per cent. It is now officially 18·8 per cent., although probably nearer to 24 per cent. or 25 per cent. Devastation has occurred as a result of massive redundancies and factory closures. My hon. Friend has referred to the latest bombshell, the closing of F. H. Lloyd. This means tremendous problems. Many people in their 40s and 50s in the area believe that they will never be able to work again. There can be no hon. Member who feels happy or complacent about such a terrible situation in which our fellow citizens, who have reached their 40s and 50s and been made redundant, believe that the opportunity to find other work has disappeared.
On Wednesday, the west midlands group of Labour Members is meeting the black country district of the


Confederation of Shipbuilding and Engineering Unions, when there will be a frank exchange of views. Of course, as Labour Members, we know what needs to be done. Our intention is to do our utmost on the Floor of the House, at Question Time and in debates, to try to persuade the Government that there must be a reversal of policy and that we should not accept mass unemployment as inevitable.
In the black country alone, there has been an increase of over 75,000 in the number of unemployed since the Government took office. The statistic was given to me in a reply by the Prime Minister. We in Walsall do not wish to become the Jarrow of pre-war years. We do not want the tremendous difficulties of continued mass unemployment and all the poverty and social problems that arise from it. We want to give the people in our area the opportunity to earn their living.
This Government are denying our people the right to earn their living. We believe that there must be a change of policy. The most effective method—it will probably arise some time in 1983—is to get a change of Government and for a Labour Government to pursue policies to reverse the tide of mass unemployment. I do not claim that a Labour Government will be able overnight to solve the problems. However, the Labour party possesses positive policies that are very different from those of the Government. If those policies are put into effect, the problems of mass unemployment and the fact that no council houses in Walsall have been constructed in the past three years can be resolved. The present Government have failed the people of Walsall.

The Under-Secretary of State for the Environment (Sir George Young): It is a pleasure to respond to a debate initiated by the hon. Member for Walsall, South (Mr. George). The hon. Gentleman and myself have played together for the parliamentary football team. If any goals were conceded, he cannot blame them on me. I was a striker and not a defender. The football team suffered the unique handicap of having two captains, one Conservative and one Labour. This meant that the united approach that the occasion called for was not always implemented.
Both the hon. Gentleman and his hon. Friend the Member for Walsall, North (Mr. Winnick) sold their constituencies short by emphasising the bad news that has affected Walsall without emphasising the good news. It might have been helpful had they mentioned Woden Electrical Products of Bilston, which is now recruiting 20 more workers after receiving a rush of orders for its products, Merrol Fire Protection Engineers of Bilston, which has won a £2 million contract from Qatar for a power and water station, Tyler Mall Superstores, which has plans to invest £5 million in a project involving a supermarket, a do-it-yourself centre and electrical wholesale premises at Cannock, the Albert Mann division of the Darlaston based Wellman Mechanical Engineering, which has won an export order worth £500,000 to supply Aluminium Bahrein with an automated billet saw and ancillary equipment, Zeeta Sales Batevale Ltd. of Brownhills, supplying scissor lifts which has won a £30,000 contract to supply steel stacking equipment to a factory in South Africa.
I quite understand why the hon. Members emphasise the down side in their constituencies, but I am sure that they would not want to give the impression to the country

that everything was on the decline in their constituencies and that there were not significant successes there which also needed mention.
The hon. Member for Walsall, South mentioned the problems facing F. H. Lloyd. As the hon. Gentleman said, we had last Friday's announcement by Lazard Brothers that the general sector of the steel castings industry had reached agreement on a major self-help rationalisation scheme, and I quite understand the hon. Gentleman's distress that jobs with F. H. Lloyd at the Wednesbury foundry and at nine other United Kingdom foundries are to be lost. However, radical action of this kind is essential if the long-term future of the industry is to be safeguarded and it is to be made fit to compete internationally and to grasp new market opportunities.
The hon. Member for Walsall, South mentioned in passing the Walsall and limestone caverns. As I think he knows, the present study of the limestone caverns, which is being jointly undertaken by my Department in partnership with Walsall, Dudley and Sandwell MBCs and the West Midlands county council is drawing to a conclusion. The consultants hope to present their final report, which will include an assessment of the risks, if any, that these caverns represent, in late spring or early summer this year. That report will be published and should remove much of the air of doubt and suspicion about the caverns that currently exists.
If the consultants find that some areas are at risk, of course the Government, in co-operation with the local authorities concerned, will urgently consider how best to remove or minimise the risk. But it would be quite wrong at this stage to anticipate the consultants' report and to assume that some areas are in immediate need of remedial work. We must await the outcome of the investigations now drawing to their conclusion.
The hon. Member for Walsall, South also pleaded for improved status for Walsall under the Inner Urban Areas Act. The Government are reviewing the bids of a number of authorities, including Walsall, and we hope to come to a conclusion and make an announcement within a matter of days.
Both hon. Members spoke of the problems facing industry in Walsall, and it is salutary to remind them of the extent of industrial support that is available to firms in their area. Aid is available under section 8 of the [Industrial Development Act 1982 to help with investment that will lead to substantial improvements in performance or the introduction of new projects or internationally mobile projects. At 30 November 1982, 56 projects had been offered almost £1·2 million on project costs of £5·2 million. We also recognise a role for the Government in encouraging the development of high technology industries operated by the Department of Industry. These schemes—including the support for innovation package and the microprocessor application project—are designed to encourage the development and application of microprocessor and other advanced technology. Exact figures for expenditure in the hon. Members' constituencies are unfortunately not available. But it is growth in precisely these sectors which is of particular importance to any economy such as that of Walsall.
As a housing Minister, I was particularly interested in what both hon. Members said about the housing problems facing Walsall council. This is not the first time that the council's problems have been debated in the House. On a previous occasion, some 18 months ago, the matter was


raised by the hon. Member for Walsall, North, and the Government's response was put by my hon. Friend the Member for Pudsey (Mr. Shaw). The broad approach of that response remains the same, but fortunately, since then there have been distinct changes of attitude by the council.
Before commenting on these changes, I should like to restate the Government's general position on housing. This is pertinent for all authorities, many of which face housing problems similar to those facing Walsall. The Government are committed to improving housing conditions. But this can be achieved only on the basis of a sound economy and by increasing the country's resources.
For this current year, in real terms, housing capital allocation has been set 6 per cent. above the provisional allocation figure for 1981–82. In cash terms, that is 30 per cent. more than local authorities' housing capital expenditure for 1981–82. For next year we have allocated nearly £2·5 billion, which is expected to be some 15 per cent. more than local authorities will spend on housing capital projects this year. In addition, we have told local authorities that next year they will have access to capital, over and above their allocations, to finance home improvement grants where their expenditure on grants is more than 10 per cent. above that for which they had planned.
It is for authorities to take advantage of these increases in allocations; and they can increase activity in the knowledge that we have tried to bring some measure of continuity into housing programmes for the first time ever by promising now that the allocations for 1984–85 will generally be set at a minimum of 80 per cent. of 1983–84 levels.
I mentioned earlier the noticeable change in Walsall council's approach since the previous debate. I find that encouraging. Initially, it seemed reluctant sellers of council houses. As the House will know, the right-to-buy provisions of the Housing Act 1980 came into effect on 3 October 1980.
Six months after that date, the council had not sold a single house under the right-to-buy provisions and had not even sent a single case to be valued for sale. That was despite the fact that more than 2,300 tenants had by then applied under the 1980 Act to buy their homes.
Not surprisingly, the Department received numerous complaints from tenants about the lack of progress with their applications. That generally unsatisfactory situation prompted the Department to take up formally with the council its rate of progress in implementing the right to buy. I am pleased to say that the council's current progress is much more encouraging. House sales are now moving apace—more than 2,200, to the value of £17½ million, were sold by the end of last year giving the council £6 million to £8 million in immediate capital receipts and the ability to augment its housing capital programme by £3 million to £4 million.
The council initially also showed scant interest in the initiatives recommended by my hon. Friend the Minister for Housing and Construction, but there are now signs of changing attitudes. It is increasing its involvement in the improvement of older houses for sale. A number of small

derelict sites have been improved with the help of derelict land grant and will be used to provide about 100 low-cost homes.
I also understand that the council is considering selling a 50-acre site for housing and taking payment for the land in completed houses to add to its stock. It is also, I believe, turning its mind towards involvement in that more difficult area of homesteading. That involves selling run-down houses with the promise of an improvement grant backed by substantial Government assistance. It has also experimented with a small scheme of enveloping. By that I mean using public moneys to carry out essential work to the external fabric of privately-owned dwellings to prevent decay into unfitness and to provide the incentive for owners to up-date their dwellings internally.
I hope that the council, and other authorities, will take advantage of the Government's latest provisions to save more houses and areas in that way.
The effect of all these initiatives has been to meet housing need which might not otherwise be met and, equally important, to increase the capacity of the council to augment its housing capital programme for 1983–84 by some £7 million. When added to its HIP capital allocation of £10·091 million, the council will be able to sustain a housing capital programme of about £17 million next year.
I turn now to the way in which that capital might be spent. The hon. Member for Walsall, South mentioned the lack of a new-build council house programme. The council is, of course, free to decide its own priorities. I understand that it is inclined to devote the bulk of its resources, some 80 per cent., to modernising and repairing older homes—about three-quarters to be spent on council housing and one-quarter on renovation grants to private housing.
It is not for me to deny that that is a wise choice. The council estimates that more than 22 per cent. of the borough's housing stock is either unfit or in need of substantial repair—for the council's own stock, that figure is 24 per cent. Faced with a decay problem of that magnitude, renovation must have a large measure of priority. I certainly would not have the temerity to argue with Walsall council's inclinations in that respect, because, as the House will know, the Government have taken a number of steps recently which recognises the importance of tackling vigorously the problem of older housing.
Walsall council has been able to take advantage of the recently increased grant rates and increased capital allocations. This year alone it expects the increases to have enabled it to add nearly £500,000 to its spending on renovation grants—an increase of some 34 per cent. on its originally planned expenditure on grants. It expects to pay grants on 448 applications this year and to increase that number next year. That compares with an average figure of 204 payments a year over the previous three years—nearly 120 per cent. I hope that his trend will be repeated in other parts of the country where the need is to tackle the problem of older housing.

The Question having been proposed after Ten o'clock on Monday evening, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at eleven minutes to One o'clock.